Title of each class of securities to which transaction applies:
Vivendi Games, Inc. common stock, par value $0.01 per share

(2)

Aggregate number of securities to which transaction applies:
800 shares of Vivendi Games, Inc. common stock

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
$1,961,635,000, calculated pursuant to Rule 0-11(c)(1)(i) and Rule 0-11(a)(4) of the Securities Exchange Act of 1934, as amended, which represents (i) the book value of Vivendi Games (the
securities of which will be received by Activision in the business combination) and (ii) $1,731,000,000 received for the issuance and sale of 62.9 million shares of Activision common stock.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION

3100 Ocean Park Boulevard
Santa Monica, California 90405

,
2008

Dear Stockholder:

On behalf of our board of directors, we are pleased to deliver to you our proxy statement relating to the proposed combination of Activision and Vivendi
Games, Inc., the interactive entertainment business of Vivendi S.A. We believe that Vivendi Games' portfolio of leading franchises, including Blizzard Entertainment, Inc.'s World of Warcraft®, will facilitate Activision's expansion into the higher operating margin and fast growing massively multiplayer online
games genre and will provide scale benefits to our international business, including establishing a meaningful presence in the rapidly growing Asian markets, which we have identified as top strategic
priorities.

In
this transaction:



Merger of Vivendi Games. Activision and Vivendi Games will combine their businesses
through the merger of a newly formed, wholly-owned subsidiary of Activision with and into Vivendi Games. As a result of the merger, Vivendi Games, the parent company of Blizzard
Entertainment, Inc. and Sierra Entertainment, Inc., will become a wholly-owned subsidiary of Activision. VGAC LLC, a subsidiary of Vivendi and the sole stockholder of Vivendi
Games, will receive approximately 295.3 million newly issued shares of Activision common stock in the merger, which number is based upon a valuation of Vivendi Games at $8.121 billion
and a per share price for Activision common stock of $27.50.



Share Purchase by Vivendi. Simultaneously with the merger, Vivendi will purchase from
Activision 62.9 million newly issued shares of Activision common stock, at $27.50 per share, for an aggregate purchase price of approximately $1.731 billion. Immediately following
completion of the merger and share purchase, Vivendi and its subsidiaries are expected to own approximately 52.2% of the issued and outstanding shares of the combined company's common stock on a fully
diluted basis.



Post-Closing Corporate Governance. Upon the closing of the transaction,
Activision's certificate of incorporation and bylaws will be amended and restated to provide for, among other things, (a) the change of the combined company's name, (b) the change of the
combined company's fiscal year end to December 31, (c) an increase in the authorized number of shares of Activision common stock, (d) certain majority and minority stockholder
protections, and (e) certain changes to the structure of the board of the combined company. As a result of these amendments, among other things, Vivendi will be entitled to appoint a majority
of the combined company's board of directors.

After
the closing of the transaction, the combined company will commence a cash tender offer for up to 146.5 million of its shares (representing approximately 50% of the shares of
Activision common stock outstanding immediately prior to the transaction) at $27.50 per share. If the tender offer is fully subscribed, Vivendi and its subsidiaries are expected to own approximately
68.0% of the issued and outstanding shares of the combined company's common stock on a fully diluted basis.

Upon
closing of the transaction, the combined company will be renamed Activision Blizzard, Inc. and will continue to operate as a
public company traded on The NASDAQ National Market under Activision's current ticker "ATVI."

Our board of directors has approved the transaction after careful deliberation. We will hold a special meeting of stockholders at
,
on ,
, 2008 at , local time, to obtain
the approval of Activision stockholders for: (a) the issuance of shares of Activision common
stock to VGAC in connection with the merger, and to Vivendi in connection with the share purchase; (b) the amendment and restatement of our certificate of incorporation; (c) the
amendment of Section 7.4(a) of our bylaws; and (d) any motion to adjourn or postpone the special meeting to a later date or dates, if necessary, to permit further solicitation of
proxies.

Our board of directors unanimously recommends that you vote "FOR" each of the proposals and subproposals described in this proxy
statement. We cannot complete the transaction unless the proposals for the issuance and sale of the shares of Activision common stock in the merger and share purchase, the
amendment and restatement of our certificate of incorporation, and the amendment of Section 7.4(a) of our bylaws are approved. Accordingly, a vote against any of the aforementioned proposals
and any related subproposals effectively will be a vote against the transaction. The approval of the motion to adjourn or postpone the special meeting is not required to complete the transaction. If
the transaction is not completed for any reason, the amendment and restatement of our certificate of incorporation (other than the amendment to increase the number of authorized shares), and the
amendment of Section 7.4(a) of our bylaws, even if approved by stockholders at the special meeting, will be abandoned and will not become effective.

We encourage you to carefully review this proxy statement, which contains important information concerning Activision and Vivendi Games, the proposed transaction
and the proposals to be voted upon by stockholders at the special meeting. In addition, the section entitled "Risk Factors" of this proxy statement contains a description of risks that you should
consider in evaluating the proposals, subproposals and the proposed transaction.

YOUR VOTE IS IMPORTANT. ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE URGED TO PROMPTLY VOTE YOUR SHARES BY PROXY. YOU MAY VOTE
ELECTRONICALLY USING THE WEBSITE ADDRESS OR BY TELEPHONE USING THE NUMBER INCLUDED ON THE ACCOMPANYING PROXY CARD. YOU MAY ALSO VOTE BY MAIL. IF YOU CHOOSE TO VOTE BY MAIL, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ACCOMPANYING PROXY CARD AS SOON AS POSSIBLE. NO POSTAGE IS REQUIRED IF THE PROXY CARD IS MAILED WITHIN THE UNITED STATES IN THE ENVELOPE PROVIDED. STOCKHOLDERS WHO ARE PRESENT AT THE
SPECIAL MEETING MAY WITHDRAW THEIR PROXY AND VOTE IN PERSON IF THEY SO DESIRE. IT IS IMPORTANT THAT YOU PROVIDE YOUR PROXY PROMPTLY SO THAT ACTIVISION CAN AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION.

We
are very excited about this transaction and believe it will better position Activision to capitalize on the continued worldwide growth in interactive entertainment. Thank you for your
support.

Robert A. Kotick

Brian G. Kelly

Chairman and Chief Executive Officer

Co-Chairman

Neither the Securities and Exchange Commission nor any state securities regulator has approved or disapproved of the proposed issuance of shares of Activision common stock in
connection with the transaction described in this proxy statement or determined if this proxy statement is truthful or complete. Any representation to the contrary is a criminal
offense.

This proxy statement is dated , 2008 and is first being mailed to stockholders on or
about , 2008.

ADDITIONAL INFORMATION

If you have any questions about the transaction or the special meeting or if you need to obtain copies of this proxy statement, proxy cards, election forms or
other documents referenced in this proxy
statement, you may contact Morrow & Co., LLC, Activision's proxy solicitor, at the address and telephone number listed below. You will not be charged for any of the documents you
request.

In
order to receive timely delivery of the documents in advance of the special meeting, you must make your request for information no later
than , 2008.

You
may obtain copies of our public filings with the Securities and Exchange Commission, or SEC, without charge by following the instructions in the section entitled "Where You Can Find
More Information" of this proxy statement.

3100 Ocean Park Boulevard
Santa Monica, California 90405

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE
HELD , 2008

To the Stockholders of Activision, Inc.:

A special meeting of stockholders of Activision, Inc. will be held
at ,
on ,
, 2008
at , local
time to consider and vote on the following proposals:

Proposal No. 1:

To approve the issuance of an aggregate of approximately 358.2 million new shares of Activision common stock, par value $0.000001 per share, to VGAC LLC and Vivendi S.A., in connection with (a) the merger
of a wholly-owned subsidiary of Activision with and into Vivendi Games, Inc., and (b) the purchase of shares of Activision common stock by Vivendi, in each case, in accordance with the business combination agreement, dated as of December 1,
2007, by and among Activision, Sego Merger Corporation, Vivendi, VGAC, and Vivendi Games, a copy of which is attached as Annex A to the proxy statement accompanying this notice;

Proposal No. 2:

To approve the amendment and restatement of Activision's amended and restated certificate of incorporation in the form attached as Annex B, subject to completion of the transaction, consisting of the following subproposals:



2Aa proposal to change the combined company's name from "Activision, Inc." to "Activision Blizzard, Inc.";



2Ba proposal to increase the number of authorized shares of capital stock from four hundred fifty-five million (455,000,000) to one billion two hundred five million (1,205,000,000);



2Ca proposal to eliminate the Series A Junior Preferred Stock;



2Da proposal to include certain quorum requirements for committees of the board of directors under certain circumstances;



2Ea proposal to require supermajority stockholder approval to amend certain sections of the certificate of incorporation;



2Fa proposal to limit the power of the board of directors to amend certain provisions of the bylaws without stockholder approval;



2Ga proposal to grant the directors designated by Vivendi certain voting powers when other Vivendi designees are not present at board or committee meetings;



2Ha proposal to include limitations on certain business activities in which Vivendi may, directly or indirectly, engage or participate;

2Ja proposal to require Vivendi or Activision Blizzard to purchase all of the combined company's issued and outstanding shares of common stock if and when Vivendi becomes the record owner of more than 90% of the issued and outstanding shares of
common stock;

2La proposal to cause the combined company to be governed by Section 203 of the Delaware General Corporation Law, a statute which restricts business combinations between corporations and their significant stockholders.

Proposal No. 3:

To approve the amendment of Section 7.4(a) of Activision's third amended and restated bylaws to restrict the amendment of additional sections of the bylaws without stockholder approval, as described in more detail in the proxy statement
accompanying this notice, subject to the completion of the transaction; and

Proposal No. 4:

To approve any motion to adjourn or postpone the special meeting to a later date or dates, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposals set forth
above.

Each
of the proposals is described more fully in the proxy statement accompanying this notice.

The
board of directors of Activision has fixed the close of business on , 2008 as the record date for
determining the stockholders entitled to receive notice of, and to
vote at, the special meeting. Accordingly, only stockholders of record at the close of business on that date are entitled to notice of, and to vote at, the special meeting or any adjournment or
postponement of the special meeting.

The board of directors of Activision unanimously recommends that you vote "FOR" each of the above proposals and subproposals. The approval of each of the listed
proposals (other than Proposal No. 4) and subproposals is a condition to the completion of the transaction. Therefore, if Activision stockholders wish to approve the transaction, they must
approve all of these proposals and subproposals.

STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.

YOUR VOTE IS IMPORTANT. ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE URGED TO PROMPTLY VOTE YOUR SHARES BY
PROXY. YOU MAY VOTE ELECTRONICALLY USING THE WEBSITE ADDRESS OR BY TELEPHONE USING THE NUMBER INCLUDED ON THE ACCOMPANYING PROXY CARD. YOU MAY ALSO VOTE BY MAIL. IF YOU CHOOSE TO VOTE BY MAIL, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY CARD AS SOON AS POSSIBLE. NO POSTAGE IS REQUIRED IF THE PROXY CARD IS MAILED FROM WITHIN THE UNITED STATES IN THE ENVELOPE PROVIDED. STOCKHOLDERS
WHO ARE PRESENT AT THE SPECIAL MEETING MAY
WITHDRAW THEIR PROXY AND VOTE IN PERSON IF THEY SO DESIRE. IT IS IMPORTANT THAT YOU PROVIDE YOUR PROXY PROMPTLY SO THAT ACTIVISION CAN AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION.

By order of the Board of Directors,

George L. RoseSecretary

, 2008
Santa Monica, California

TABLE OF CONTENTS

CERTAIN FREQUENTLY USED TERMS

1

QUESTIONS AND ANSWERS

3

SUMMARY

12

The Transaction

12

The Business Combination Agreement

13

Special Meeting

20

Other Matters

22

Per Share Market Price Data

24

Selected Historical Financial Data of Activision

25

Selected Historical Financial Data of Vivendi Games

26

Summary Unaudited Pro Forma Condensed Combined Financial Data

27

Comparative Per Share Data

29

RISK FACTORS

31

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

51

THE SPECIAL MEETING

52

THE TRANSACTION

58

Background of the Transaction

58

Activision's Reasons for the Transaction and Tender Offer

63

Opinion of Activision's Financial Advisor

68

Interests of Activision's Executive Officers and Directors in the Transaction

78

Rights Plan Amendment

79

No Appraisal Rights

79

Material United States Federal Income Tax Consequences

80

U.S. Federal or State and Foreign Regulatory Matters

80

Accounting Treatment

80

THE BUSINESS COMBINATION AGREEMENT

81

Structure of the Transaction

81

The Merger

81

The Share Purchase

83

The Tender Offer

84

Conditions to the Transaction

86

Definition of Material Adverse Effect

88

Restrictions on Solicitation of Acquisition Proposals

89

Termination; Termination Fees and Expenses

92

Conduct of Business Prior to the Closing Date

95

Certain Other Covenants

98

Representations and Warranties

100

Miscellaneous

103

CERTAIN AGREEMENTS RELATED TO THE TRANSACTION

104

Voting and Lock-Up Agreements

104

Investor Agreement

106

Tax Sharing Agreement

110

BOARD AND MANAGEMENT OF ACTIVISION BLIZZARD

112

CORPORATE GOVERNANCE OF ACTIVISION BLIZZARD

124

THE PROPOSALS

132

Proposal No. 1The Share Issuance Proposal

132

Proposal No. 2The Charter Amendment Proposal

133

Proposal No. 3The Bylaw Amendment Proposal

140

Proposal No. 4The Adjournment Proposal

141

i

OTHER MATTERS TO COME BEFORE THE MEETING

142

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

143

ACTIVISION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ACTIVISION

156

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK OF ACTIVISION

209

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF ACTIVISION

210

VIVENDI GAMES BUSINESS

213

VIVENDI GAMES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION OF VIVENDI GAMES

216

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK OF VIVENDI GAMES

256

QUARTERLY FINANCIAL INFORMATION FOR VIVENDI GAMES

257

FUTURE STOCKHOLDER PROPOSALS

258

HOUSEHOLDING OF SPECIAL MEETING MATERIALS

259

WHERE YOU CAN FIND MORE INFORMATION

260

INDEX TO FINANCIAL STATEMENTS

F-1

ii

Annexes

Annex A

Business Combination Agreement

Annex B

Form of Amended and Restated Certificate of Incorporation of Activision, Inc.

Annex C

Form of Amended and Restated Bylaws of Activision, Inc.

Annex D

Opinion of Allen & Company LLC

Annex E

Kotick Voting and Lock-Up Agreement

Annex F

Kelly Voting and Lock-Up Agreement

iii

CERTAIN FREQUENTLY USED TERMS

Unless otherwise specified or if the context so requires:



"Activision"
or "we" refers to Activision, Inc.;



"Activision
Blizzard" refers to the combined company following the completion of the transaction, which will be re-named "Activision Blizzard, Inc." and
will be the parent of both Activision's and Vivendi Games' businesses;



"Blizzard"
or "Blizzard Entertainment" refers to Blizzard Entertainment, Inc., a wholly-owned indirect subsidiary of Vivendi and VGAC and a direct wholly-owned
subsidiary of Vivendi Games;

"business
combination agreement" refers to the Business Combination Agreement, dated as of December 1, 2007, by and among Activision, Merger Sub, Vivendi, VGAC and
Vivendi Games, a copy of which is attached as Annex A to this proxy statement;



"closing
date" refers to the date on which the transaction is consummated;

"new
credit facilities" refers to the debt agreements which may be entered into by Activision prior to the closing date in accordance with the business combination agreement
with either (1) banks or other financial institutions or (2) Vivendi or one or more of Vivendi's affiliates, on market terms in an arm's-length transaction;



"post-closing
bylaws" refers to the amended and restated bylaws of the combined company immediately following the consummation of the transaction, which includes
the amendment contemplated by the bylaw amendment proposal and certain other amendments contemplated in the business combination agreement to be adopted by the board of directors at closing, a form of
which is attached as Annex C to this proxy statement;



"post-closing
certificate of incorporation" refers to the amended and restated certificate of incorporation of the combined company immediately following the
consummation of the transaction, which includes the amendments contemplated in the charter amendment proposals, a form of which is attached as Annex B to this proxy statement;



"Sierra"
refers to Sierra Entertainment, Inc., a wholly-owned indirect subsidiary of Vivendi and VGAC and a direct wholly-owned subsidiary of Vivendi Games;

"transaction"
refers to the combination of the respective businesses of Activision and Vivendi Games pursuant to the merger and the share purchase by Vivendi contemplated by
the business combination agreement;

"VGAC"
refers to VGAC LLC, a wholly-owned indirect subsidiary of Vivendi and the sole stockholder of Vivendi Games;



"VHIC"
refers to Vivendi Holding I Corp., a wholly-owned indirect subsidiary of Vivendi;



"Vivendi"
refers to Vivendi S.A., a société anonyme organized under the laws of France,
the stock of which is traded on Euronext Paris;



"Vivendi
Games" refers to Vivendi Games, Inc., a wholly-owned indirect subsidiary of Vivendi and a wholly-owned direct subsidiary of VGAC;



"Vivendi
Games Mobile" refers to Vivendi Games Mobile, a division of Vivendi Games focused on developing and distributing games playable on mobile phone handsets; and



"Vivendi
Voting Interest" refers to the percentage of outstanding Activision Blizzard common stock owned of record by Vivendi and its controlled affiliates.

2

QUESTIONS AND ANSWERS

QUESTIONS AND ANSWERS ABOUT THE TRANSACTION

Q1:

What is the transaction?

A1:

Activision and Vivendi are proposing to combine Vivendi Games, Vivendi's interactive entertainment business, with Activision's businesses. The transaction is summarized in the section entitled "SummaryThe Transaction" and is described more
fully therein.

In the transaction:



Merger of Vivendi Games. Activision and Vivendi Games will combine their businesses through the merger of a newly formed, wholly-owned subsidiary of Activision with and into
Vivendi Games. As a result of the merger, Vivendi Games, the parent company of Blizzard Entertainment and Sierra, will become a wholly-owned subsidiary of Activision. VGAC will receive approximately 295.3 million newly issued shares of
Activision common stock in the merger, which number is based upon a valuation of Vivendi Games at $8.121 billion and a per share price for Activision common stock of $27.50.



Share Purchase by Vivendi. Simultaneously with the merger, Vivendi will purchase from Activision 62.9 million newly issued shares of Activision common stock, at $27.50
per share, for an aggregate purchase price of approximately $1.731 billion. Immediately following completion of the merger and share purchase, Vivendi and its subsidiaries are expected to own approximately 52.2% of the issued and outstanding
shares of the combined company's common stock on a fully diluted basis.



Post-Closing Corporate Governance. Upon the closing of the transaction, Activision's certificate of incorporation and bylaws will be amended and restated to provide for,
among other things, (a) the change of the company's name, (b) the change of the combined company's fiscal year end to December 31, (c) an increase in the authorized number of shares of Activision common stock, (d) certain
majority and minority stockholder protections, and (e) certain changes to the structure of the board. As a result of these amendments, among other things, Vivendi will be entitled to appoint a majority of the combined company's board of
directors.

After the closing of the transaction, the combined company will commence a cash tender offer for up to 146.5 million of its shares (representing approximately 50% of the shares of Activision common stock outstanding immediately prior to the
transaction) at $27.50 per share. If the tender offer is fully subscribed, Vivendi and its subsidiaries are expected to own approximately 68.0% of the issued and outstanding shares of the combined company's common stock on a fully diluted
basis.

For additional information regarding the transaction, see the section below entitled "The Transaction."

Q2:

What happens to my Activision common stock as a result of the transaction?

A2.

If the transaction is completed, your shares of Activision common stock will continue to remain outstanding, and no physical change will occur. Upon closing of the transaction, your shares of Activision common stock will represent an ownership
interest in Activision Blizzard, the combined company, parent of both Activision's and Vivendi Games' businesses. You will not be required to sell or exchange your shares of Activision common stock in the transaction.

3

Q3:

What symbol will the shares of the combined company's common stock trade under after completion of the transaction?

A3:

Upon closing of the transaction, shares of common stock of the combined company, which will be renamed "Activision Blizzard, Inc." will be traded on The NASDAQ National Market under Activision's current ticker symbol "ATVI."

Q4:

What percentage of Activision Blizzard will Activision's current stockholders own after completion of the transaction and the tender offer?

A4.

Immediately upon closing of the transaction, our current stockholders will own approximately 47.8% of the issued and outstanding shares of common stock of Activision Blizzard on a fully diluted basis. If the post-closing tender offer is fully
subscribed, our current stockholders are expected to own approximately 32.0% of the issued and outstanding shares of Activision Blizzard on a fully diluted basis upon closing of the tender offer.

Q5:

Will any of the cash proceeds received by Activision in connection with the transaction be distributed to Activision's stockholders?

A5:

No. We will not distribute any of the cash or other consideration that we receive in connection with the transaction to our stockholders. After the closing of the transaction, however, the combined company will commence a cash tender offer for up to
146.5 million of the issued and outstanding shares of its common stock at a price of $27.50 per share. You will be given the opportunity to tender some or all of your Activision shares in the tender offer, subject to proration if the tender
offer is oversubscribed. For more information about the tender offer see the section entitled "The Business Combination AgreementThe Tender Offer."

Q6:

Will Activision or its stockholders acquire any ownership interest in Vivendi as a result of the transaction?

A6:

No. Neither Activision nor its stockholders will acquire any ownership interest in Vivendi as a result of the transaction. Upon completion of the transaction, Vivendi Games will become a wholly-owned subsidiary of Activision.

Q7:

Are there any risks related to the transaction?

A7:

Yes. The transaction may not achieve the expected benefits because of the risks and uncertainties discussed in the section entitled "Risk Factors" of this proxy statement, which we urge you to read and consider carefully. Our board of directors
considered a variety of potential risks in its deliberations concerning the transaction, including, without limitation:



After completion of the transaction, the combined company may not successfully integrate the operations of Activision and Vivendi Games in a timely manner, or at all, and the combined company may not realize the anticipated benefits or synergies of
the transaction to the extent, or in the timeframe, anticipated;



As a result of the transaction and the tender offer, Vivendi will own between 52.2% and 68.0% of the combined company's common stock on a fully diluted basis, and will have the ability to determine the outcome of matters submitted to Activision
Blizzard stockholders;



The transaction would make it difficult for another party to acquire Activision Blizzard or otherwise effect a change of control unless Vivendi supported such a transaction;



After the transaction, Vivendi will have the ability, subject to certain limitations, to sell its shares of Activision Blizzard common stock, which could adversely affect the combined company's stock price; and

4



If the amendment to our certificate of incorporation is approved, we will be able to issue more shares of common stock than currently authorized, which could have a dilutive effect on earnings per share and the voting power of Activision Blizzard
stockholders.

Q8.

When does Activision expect to complete the transaction?

A8.

If Activision's stockholders approve each of the proposals and subproposals set forth in this proxy statement, we will complete the transaction when all of the other conditions set forth in the business combination agreement have been satisfied or
waived. We are working toward satisfying these conditions and completing the transaction as quickly as possible. We currently anticipate completing the transaction in the first half of calendar year 2008. Because the transaction is subject to a
number of other conditions, some of which are beyond our control, the exact timing cannot be predicted.

Q9:

What are the United States Federal income tax consequences to the Activision stockholders of the transaction?

A9:

Activision stockholders will not recognize any gain or loss for United States federal income tax purposes as a result of (a) the consummation of the transaction or (b) the adoption of the proposed amendments to Activision's certificate of
incorporation. For more information about the United State federal income tax consequences, see the section entitled "The Transaction Material United States Federal Income Tax Consequences" of this proxy statement.

Q10:

Do I have appraisal or dissenters' rights?

A10:

No. You will not be entitled to exercise any appraisal or dissenters' rights in connection with the transaction.

QUESTIONS AND ANSWERS ABOUT THE TENDER OFFER

Q11:

What is the tender offer?

A11:

Under the terms of the business combination agreement, after the closing of the transaction, the combined company has agreed to commence a self tender offer to repurchase up to 146.5 million shares of its common stock (representing approximately
50% of the shares of Activision common stock outstanding immediately prior to the transaction) at a purchase price of $27.50 per share.

The tender offer will offer liquidity to Activision Blizzard stockholders at $27.50 per share, regardless of the then-current market price per share, subject to proration if the tender offer is oversubscribed, and will allow Vivendi and any
other non-tendering stockholders to increase their respective percentage ownership of Activision Blizzard. Activision Blizzard stockholders will not be diluted by the tender offer except to the extent Vivendi purchases additional shares of Activision
Blizzard as it is required to do if the aggregate tender offer consideration exceeds $2.928 billion. In addition, the tender offer will allow participating Activision Blizzard stockholders to sell their shares at a premium to the market price of
Activision common stock at the time of the execution of the business combination agreement.

Assuming that the maximum number of shares are tendered, the aggregate purchase price for the shares of common stock of Activision Blizzard purchased in the tender offer will be approximately $4.028 billion.

For a more detailed discussion of the tender offer, see the section entitled "The Business Combination AgreementThe Tender Offer."

5

Q12:

Who can participate in the tender offer?

A12:

Only stockholders as of the record date may participate in the tender offer. Vivendi has agreed that neither it nor any of its subsidiaries will tender any of their respective shares in the tender offer. Further, Messrs. Robert A. Kotick,
Activision's Chairman and Chief Executive Officer, and Brian G. Kelly, Activision's Co-Chairman, have agreed not to tender more than one third (1/3) of their shares of common stock and other equity securities of
Activision Blizzard.

Q13:

How do I tender my shares of Activision common stock in the tender offer?

A13:

The procedure for tendering your shares of Activision common stock (which will represent an interest in the combined company, Activision Blizzard, after closing of the transaction) in the tender offer and other important information relating to the
tender offer will be addressed in an offer to purchase and related materials that we intend to file with the SEC after the closing of the transaction. These materials will also be mailed to you as a stockholder and will be available free of charge at
the SEC's website at http://www.sec.gov, or from the information agent to be named in the tender offer materials.

Q14:

When does Activision expect to commence and complete the tender offer?

A14:

We expect to commence the tender offer within five (5) days after the closing of the transaction, which we expect to occur in the first half of calendar year 2008, and to complete the tender offer approximately twenty (20) business days
after commencement. The time period for completing the tender offer may be extended under certain circumstances described more fully in the section entitled "The Business Combination AgreementThe Tender Offer."

Q15:

Can Activision Blizzard decrease the price per share of the tender offer?

A15:

No. The price per share in the tender offer will be $27.50 per share, regardless of the trading price of shares of Activision Blizzard common stock at the time of the commencement of the tender offer.

Q16:

Will Activision Blizzard buy all shares that are tendered?

A16:

The tender offer will not be subject to any minimum condition on the number of shares tendered. As a result, subject to the other conditions of the tender offer being satisfied and the proration described in the following sentence, Activision
Blizzard will purchase any and all shares that are tendered, even if the total number of shares tendered by all of our stockholders is less than 146.5 million shares. If the total number of shares of Activision Blizzard common stock tendered is
more than 146.5 million shares, Activision Blizzard will purchase the shares pro rata, which means that each stockholder who accepts the offer will have only a portion of such stockholder's shares bought by Activision Blizzard so that Activision
Blizzard purchases not more than the maximum of 146.5 million shares.

Q17:

How will Activision Blizzard fund the purchase of shares that are tendered?

A17:

Under the terms of the business combination agreement, Activision and Vivendi have agreed the purchase of the shares tendered in the tender offer will be funded as follows:



the first $2.928 billion of the aggregate consideration will be funded by Activision Blizzard with proceeds from the share purchase described above, available cash on hand and, if necessary, borrowings made under one or more new credit
facilities;

6



if the aggregate consideration is more than $2.928 billion, Vivendi has agreed to purchase from Activision Blizzard, at a purchase price of $27.50 per share, additional newly issued shares of Activision Blizzard common stock in an amount equal
to the lesser of (a) $700 million and (b) the excess of the aggregate consideration over $2.928 billion, which amount will be used to fund the amount of the aggregate consideration that is in excess of $2.928 billion;
and



if the aggregate consideration exceeds $3.628 billion, Activision will fund the additional amount of the aggregate consideration that is in excess of $3.628 billion (up to the maximum aggregate consideration of $4.028 billion) through
borrowings made under one or more new credit facilities issued by Vivendi or third party lenders.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

Q18:

Why am I receiving this proxy statement?

A18:

You are receiving this proxy statement because you have been identified as a stockholder of Activision and, as an Activision stockholder, you are entitled to vote at the special meeting to approve the matters below in order for us to complete the
transaction. This proxy statement contains important information about the business combination agreement, the transaction, the tender offer, the special meeting and other related matters. You should read this proxy statement, including all of the
annexes, carefully and in their entirety.

Q19:

What matters will be voted on at the special meeting?

A19:

At the special meeting, you will be asked to consider and vote on proposals:

Proposal No. 1:

To approve the issuance of an aggregate of approximately 358.2 million new shares of Activision common stock in connection with the transaction. This proposal is referred to in this proxy statement as the "share issuance
proposal."

Proposal No. 2:

To approve the amendment and restatement of our amended and restated certificate of incorporation (including all related subproposals), subject to the completion of the transaction. This proposal is referred to in this proxy statement as the
"charter amendment proposal."

Proposal No. 3:

To approve the amendment of Section 7.4(a) of our third amended and restated bylaws, subject to the completion of the transaction. This proposal is referred to in this proxy statement as the "bylaw amendment
proposal."

Proposal No. 4:

To approve any motion to adjourn or postpone the special meeting to a later date or dates, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposals set forth above. This
proposal is referred to in this proxy statement as the "adjournment proposal."

You may also be asked to act on other business, if any, that may properly come before the special meeting (or any adjournment or postponement thereof). We currently do not anticipate that any other business will be presented at the special
meeting.

Q20:

What vote is required to approve each proposal?

A20:

The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote is required to approve the charter amendment proposal and the bylaw amendment proposal.

7

The affirmative vote of a majority of the votes cast affirmatively or negatively is required to approve the share issuance proposal and the adjournment proposal.

Q21:

How does the Activision board of directors recommend that I vote on each of the proposals?

A21:

After careful consideration, our board of directors unanimously recommends that you vote:



"FOR" Proposal No. 1the issuance of shares of our common stock in connection with the transaction;

"FOR" Proposal No. 3the amendment of Section 7.4(a) of our third amended and restated bylaws; and



"FOR" Proposal No. 4adjournment of the special meeting, if necessary.

For a more complete description of the recommendations of our board of directors as well as the reasons underlying the recommendations, see the sections entitled "The TransactionActivision's Reasons for the Transaction and Tender Offer" and
"SummaryRecommendations of the Board of Directors of Activision."

Q22:

When and where will the special meeting of Activision stockholders be held?

A22:

Unless adjourned or postponed, the special meeting will be held
at at
, local time, on ,
, 2008. Subject to space
availability, all stockholders as of the record date, or their duly appointed proxies, may attend the meeting. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration and seating will begin
at , local time.

Q23:

Who is entitled to attend and vote at the special meeting?

A23:

You are entitled to receive notice of, and vote at, the special meeting (and any adjournment or postponement thereof) only if you were a stockholder of Activision at the close of business
on , 2008, the record date for the special meeting.

On the record date, there
were shares of Activision common
stock issued and outstanding and entitled to vote. Each share of Activision common stock outstanding on the record date will be entitled to one (1) vote on each matter presented for action at the special meeting.

Q24:

What constitutes a quorum?

A24:

Stockholders who hold a majority of all of the shares of capital stock of Activision entitled to vote at the special meeting must be present in person or represented by proxy in order to constitute a quorum to conduct business. Abstentions and broker
non-votes will be included for purposes of determining whether a quorum is present at the special meeting.

Q25:

What is a broker non-vote?

A25:

A broker non-vote occurs when a broker, bank or other nominee record holder holding shares for you does not vote on a particular proposal because the broker, bank or other nominee record holder does not have discretionary voting power with respect to
that proposal under the rules applicable to broker-dealers and has not received voting instructions from you.

8

Q26:

How do I vote?

A26:

You are being asked to vote both any shares held directly in your name as a stockholder of record and any shares you hold in "street name" as a beneficial owner. Shares held in "street name" are shares held in a stock brokerage account or shares held
by a bank, broker or other custodian.

If you hold your shares directly as a record holder, you may vote prior to the special meeting by:



calling the number shown on your proxy card;



visiting the website shown on your proxy card to vote via the Internet; and

If your shares are held in "street name" by a bank, broker or other nominee record holder, your bank, broker or other nominee record holder will send you separate instructions describing the procedure for voting your shares. "Street-name"
stockholders who wish to vote in person at the special meeting will need to obtain a proxy from the bank, broker or other nominee record holder that holds their shares.

Q27:

May I change my vote after I have delivered my proxy or voting instruction card?

A27:

Yes. If you hold your shares in your name as an Activision stockholder of record, you may change your vote at any time before your shares are voted at the special meeting by:



delivering a signed written notice to our Corporate Secretary stating that you are revoking your proxy;

submitting a new proxy by telephone or via the Internet (in which case, your latest telephone or Internet voting instructions will be followed); or



attending the special meeting and voting in person. However, your attendance at the special meeting in and of itself will not cause your previously granted proxies to be revoked; you must vote at the
special meeting to revoke any prior proxies.

If your shares are held in "street name," and you have instructed a bank, broker or other nominee record holder to vote your shares, you must follow the directions you receive from your bank, broker or other nominee record holder in order to change
or revoke your vote. You may also change your vote by attending the special meeting and voting in person provided that you have obtained a signed proxy from the record holder (i.e., your bank, broker or
other nominee record holder) giving you the right to vote those shares.

Q28:

When does an abstention occur?

A28:

An abstention occurs when you affirmatively instruct a vote to be withheld (by checking the "abstain" or "withhold authority to vote" box on the proxy card) or when a stockholder who has not given a proxy is present at the special meeting but does
not cast a ballot or submit a proxy card in person.

9

Q29:

What happens if I fail to vote on the proposals or if I abstain from voting?

A29:

Your failure to vote on (a) the charter amendment proposal (and related subproposals), or (b) the bylaw amendment proposal will have the same effect as a vote against each of these
proposals. This is because the vote that is required to approve these proposals is based upon the number of shares outstanding as of the record date and entitled to vote thereon (rather than upon the shares actually voted). Similarly, if you respond
with an "abstain" vote or are present in person or by proxy and do not vote any of your shares on these proposals, this will have the same effect as a vote against these proposals.

Your failure to vote on (a) the share issuance proposal or (b) the adjournment proposal will have no effect on the outcome of the vote for such proposals. This is because the vote that is required to approve these proposals is based upon
the number of shares actually voted. Similarly, if you respond with an "abstain" vote, your proxy will not affect the outcome of the vote, because such abstentions will be counted in determining the presence of a quorum but they will not be
considered to be voted for purposes of any proposal.

Q30:

How will broker non-votes be treated?

A30:

Under the rules applicable to broker-dealers, brokers, banks and other nominee record holders holding shares in "street name" have the authority to vote on routine proposals when they have not received instructions from beneficial owners. However,
brokers, banks and other nominee record holders are precluded from exercising their voting discretion with respect to the approval of non-routine matters such as the approval of the proposals set forth in this proxy statement. As a result, absent
specific instructions from the beneficial owner, brokers, banks and other nominee record holders are not empowered to vote those "street name" shares.

Since the vote required for approval of (a) the charter amendment proposal and (b) the bylaw amendment proposal is based on a percentage of the shares outstanding, broker non-votes will have the same effect as a vote against these proposals. However, broker non-votes will have no effect on the outcome of the vote for the share issuance proposal or the adjournment proposal because the vote required for approval of these
proposals is based on the number of shares actually voted, whether in person or by proxy.

Q31:

Is it possible to vote via the Internet or by telephone?

A31:

If you hold your shares directly as a record holder, you may vote your shares via the Internet or by telephone by following the instructions included with your proxy card.

If your shares are held in "street name" by your broker, bank or other nominee record holder, please check the voting instruction card you received or contact your broker, bank or other nominee record holder to determine whether you will be able to
vote your shares via the Internet or by telephone.

Q32:

What do I do if I receive more than one proxy card or set of voting instructions?

A32:

If you hold shares in both "street name" and directly as a record holder, you may receive more than one proxy card or voting instruction card relating to the special meeting. Please complete, date, sign and return separately all of the proxy cards or
voting instruction cards that you receive (or submit you proxy via the Internet or by telephone) to ensure that all of your shares are voted.

10

Q33:

What if I can't find where my Activision shares are held?

A33:

To determine if you are a holder of record, please contact our transfer agent, Continental Stock Transfer & Trust Company toll-free, at (800) 509-5586 or if you are an international holder, at (212) 509-4000. If you are a record
holder, Continental will be able to assist you with your stock ownership needs. If you are not, please contact your bank, broker or nominee record holder to determine who the record holder of your shares is.

Q34:

Who can help answer my questions?

A34:

If you have additional questions about the transaction after reading this proxy statement, or if you need assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy card, please
call Activision's proxy solicitor, Morrow & Co., LLC, toll-free at (800) 573-4804. Banks and brokerage firms please call (203) 658-9400 and international holders may call collect at (203) 658-9400.

If your shares are held in a stock brokerage account or by a bank or other nominee record holder in "street name," you should also call your broker, bank or other nominee record holder for additional information.

11

SUMMARY

The following summary highlights certain information contained in this proxy statement. This summary may not contain all of the
information that may be important to you. For a more complete description of the business combination agreement and the transactions contemplated thereby, we encourage you to read this proxy
statement, including all of the annexes, carefully and in their entirety. You may obtain copies of our public filings with the SEC without charge by following the instructions set forth in the section
entitled "Where You Can Find More Information" in this proxy statement.

The Transaction

Activision and Vivendi have entered into a business combination agreement to combine Vivendi Games, Vivendi's interactive entertainment business, with Activision.
We believe that Vivendi Games' portfolio of leading franchises, including Blizzard Entertainment's World of Warcraft®, will facilitate
Activision's expansion into the higher operating margin and fast growing massively multiplayer online games genre and will provide scale benefits to our international business, including establishing
a meaningful presence in the rapidly growing Asian markets, which we have identified as top strategic priorities.

The
transaction will be governed by the terms of a business combination agreement, a copy of which is attached as Annex A to this proxy statement. We encourage you to read the
business combination agreement, including all of the exhibits thereto, carefully and in their entirety. For more information on the business combination agreement, see the section entitled "The
Business Combination Agreement."

In
the transaction:



Merger of Vivendi Games. Activision and Vivendi Games will combine their businesses
through the merger of a newly formed, wholly-owned subsidiary of Activision with and into Vivendi Games. As a result of the merger, Vivendi Games, the parent company of Blizzard Entertainment and
Sierra, will become a wholly-owned subsidiary of Activision. VGAC will receive approximately 295.3 million newly issued shares of Activision common stock in the merger, which number is based
upon a valuation of Vivendi Games at $8.121 billion and a per share price for Activision common stock of $27.50.



Share Purchase by Vivendi. Simultaneously with the merger, Vivendi will purchase from
Activision 62.9 million newly issued shares of Activision common stock, at $27.50 per share, for an aggregate purchase price of approximately $1.731 billion. Immediately following
completion of the merger and share purchase, Vivendi and its subsidiaries are expected to own approximately 52.2% of the issued and outstanding shares of the combined company's common stock on a fully
diluted basis.



Post-Closing Corporate Governance. Upon the closing of the transaction,
Activision's certificate of incorporation and bylaws will be amended and restated to provide for, among other things, (a) the change of the combined company's name, (b) the change of the
combined company's fiscal year end to December 31, (c) an increase in the authorized number of shares of Activision common stock, (d) certain majority and minority stockholder
protections, and (e) certain changes to the structure of the board of the combined company. As a result of these amendments, among other things, Vivendi will be entitled to appoint a majority
of the combined company's board of directors.

After
the closing of the transaction, the combined company will commence a cash tender offer for up to 146.5 million of its shares (representing approximately 50% of the shares of
Activision common stock outstanding immediately prior to the transaction) at $27.50 per share. If the tender offer is fully

12

subscribed,
Vivendi and its subsidiaries are expected to own approximately 68.0% of the issued and outstanding shares of the combined company's common stock on a fully diluted basis.

For
a more complete description of Activision's ownership structure following the transaction, see the section entitled "The Business Combination AgreementThe Share
PurchaseOwnership of Activision Common Stock Following the Transaction."

The
following diagrams illustrate (a) the steps of the transaction and (b) the organizational structure of Activision Blizzard and its subsidiaries after the transaction:

Transaction

Post-Transaction Structure

(1)

If
the post-transaction self tender offer is fully-subscribed, (a) Vivendi and its subsidiaries are expected to own approximately 68.0% of the issued and outstanding shares of
Activision Blizzard common stock and (b) Activision's existing stockholders are expected to own approximately 32.0% of the issued and outstanding shares of Activision Blizzard common stock, in
each case on a fully diluted basis.

(2)

Includes
Blizzard Entertainment, Sierra, Sierra Online and Vivendi Games Mobile.

The Business Combination Agreement

Parties to the Business Combination Agreement

Activision, Inc.

We are a leading international developer, publisher and distributor of interactive entertainment software and peripheral products covering diverse game
categories, including action/adventure, action sports, racing, role-playing, simulation, first-person action, music-based gaming and strategy.

Our
publishing business involves the development, marketing and sale of products either directly, by license or through our affiliate label program with certain third-party publishers.
Our product portfolio includes top-selling franchises for PC and console platforms, such as Guitar Hero, Call of Duty® and the Tony Hawk series, as well as
Spider-Man, X-Men, Shrek®, James Bond and TRANSFORMERS.

Our
distribution business consists of operations in Europe that provide logistical and sales services to third-party publishers of interactive entertainment software, Activision's own
publishing operations and manufacturers of interactive entertainment hardware.

We
maintain operations in the United States, Canada, the United Kingdom, France, Germany, Ireland, Italy, Japan, Australia, Scandinavia, Spain, the Netherlands and South Korea.
Activision's headquarters are located at 3100 Ocean Park Boulevard, Santa Monica, California 90405, Telephone: (310) 255-2000.

13

Sego Merger Corporation

Sego Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Activision, or Merger Sub, was formed on November 29, 2007 for the purpose
of effecting the merger contemplated by the business combination agreement. Merger Sub has not conducted any activities or operations to date, except for those incidental to its formation and
undertaken in connection with the transaction. Merger Sub's headquarters are located at 3100 Ocean Park Boulevard, Santa Monica, California 90405, Telephone: (310) 255-2000.

Vivendi S.A.

Vivendi S.A., a société anonyme (a form of limited liability company)
organized under the laws of France, or Vivendi, is a global leader in digital entertainment with activities in music, television, cinema, mobile, Internet, and games through its ownership of Universal
Music Group, Canal+ Group, SFR, Maroc Telecom and Vivendi Games. In 2006, Vivendi had revenues of over €20 billion and a global headcount of 39,000 employees. Listed on the
Paris stock market, NYSEEuronext, compartiment A, under the symbol "VIV," Vivendi is a member of the CAC 40 (one of the main Euronext stock indices).

Vivendi's
media business is comprised of (a) Vivendi Games, a global developer, publisher and distributor of multi-platform interactive entertainment; (b) Universal Music
Group, the world's No. 1 music content company; (c) the Canal+ Group, the French leader in premium and theme television channel distribution and programming; and (d) a 20%
interest in NBC Universal, one of the world's leading media companies.

Vivendi Games, Inc., a Delaware corporation, or Vivendi Games, is a direct wholly-owned subsidiary of VGAC LLC, which is a Delaware limited
liability company and an indirect wholly-owned subsidiary of Vivendi.

Vivendi
Games is a global developer, publisher and distributor of multi-platform interactive entertainment. Vivendi Games is the leader in terms of subscriber base and revenues in the
subscription-based MMORPG category, has a traditional PC, console, handheld and mobile games business, and has entered the casual online and mobile gaming segments. Through its subsidiary, Blizzard
Entertainment, Vivendi Games' portfolio includes the MMORPG hit World of Warcraft and the Warcraft®, StarCraft®, and Diablo® series.

At the effective time of the transaction, Merger Sub, a newly formed, wholly-owned subsidiary of Activision, will merge with and into Vivendi Games, an indirect
wholly-owned subsidiary of Vivendi and the parent of Blizzard Entertainment and Sierra. Vivendi Games will survive the merger and become a wholly-owned subsidiary of Activision.

14

Consideration to be Received in the Merger

Vivendi Games Common Stock. At the effective time of the merger, each outstanding share of Vivendi Games common stock will be
converted into the right to receive 369,136.36364 newly issued shares of Activision common stock, which is referred to in this proxy statement as the "exchange ratio." Activision will issue
approximately 295.3 million shares of Activision common stock to VGAC, the sole stockholder of Vivendi Games, in the merger, which number is based upon a valuation of Vivendi Games at
$8.121 billion and a per share price for Activision common stock of $27.50. For a more complete description of the merger consideration, see the section entitled "The Business Combination
AgreementThe MergerConsideration to be Received in the Merger."

Treatment of Equity Grants under the Blizzard Equity Plan. Certain Blizzard Entertainment employees participate in the
Blizzard Entertainment 2006 Equity Incentive Plan, which is referred to in this proxy statement as the "Blizzard equity plan," pursuant to which they have been granted options to acquire shares of
Blizzard common stock and/or shares of restricted Blizzard common stock. Under the terms of the Blizzard equity plan, at the effective time of the transaction, all outstanding and unexercised options
to acquire shares of Blizzard common stock as well as all outstanding shares of restricted Blizzard common stock will be cancelled and converted into the right to receive an amount in cash, each in
accordance with the terms of the Blizzard equity plan. The estimated aggregate cash payments to be made by Activision Blizzard to Blizzard equity plan participants will be $113.0 million at the
closing of the transaction and an additional $89.2 million eighteen months after such closing, in each case assuming the Blizzard equity plan participants remain employed at Blizzard through
the applicable date. For a more complete description of the treatment of the equity grants and certain payments required to be made by the combined company under the Blizzard equity plan, see the
section entitled
"The Business Combination AgreementThe MergerTreatment of Equity Grants under the Blizzard Equity Plan."

Share Purchase

Simultaneously with the closing of the merger, Vivendi will purchase from Activision, at a purchase price of $27.50 per share, approximately 62.9 million
newly issued shares of Activision common stock for an aggregate purchase price of approximately $1.731 billion in cash. For a more complete description of the share purchase, see the section
entitled "The Business Combination AgreementThe Share Purchase."

Name Change

Upon closing of the transaction, the combined company will be renamed "Activision Blizzard, Inc."

Post-Closing Corporate Governance

Upon closing of the transaction, our certificate of incorporation and bylaws will be amended and restated to provide for, among other things, (a) the
change of the combined company's name, (b) the change of the combined company's fiscal year end to December 31, (c) an increase in the authorized number of shares of Activision
common stock, (d) certain majority and minority stockholder protections, and (e) certain changes to the structure of the board. As a result of these amendments, among other things,
Vivendi will be entitled to appoint a majority of the combined company's board of directors.

As
a result of these changes to our certificate of incorporation and bylaws, effective as of the closing of the transaction, the board of directors of Activision Blizzard will consist of
11 members: six (6) directors designated by Vivendi, two (2) Activision executive directors and three (3) independent directors.

15

The
Vivendi designated directors initially will be Messrs. René Pénisson, Jean-Bernard Lévy, Bruce L. Hack, Doug
Morris, Philippe Capron and Frédéric Crépin. The executive directors initially will be Messrs. Robert A. Kotick, our Chairman and Chief Executive
Officer, and Brian G. Kelly, our Co-Chairman. The three independent directors initially will be Messrs. Robert J. Corti, Robert J. Morgado and Richard Sarnoff, each of
whom currently serves on our board of directors.

Initially,
René Pénisson will be Chairman of Activision Blizzard.

Following
the completion of the transaction, Robert A. Kotick will be President and Chief Executive Officer and Brian G. Kelly will be Co-Chairman of Activision
Blizzard. Bruce L. Hack, current Chief Executive Officer of Vivendi Games, will serve as Vice-Chairman and Chief Corporate Officer of Activision Blizzard, responsible for leading
the merger integration and the finance, human resources and legal functions. Michael J. Griffith will serve as President and Chief Executive Officer of Activision Publishing, which after
closing will include the Sierra, Sierra Online and Vivendi Games Mobile divisions in addition to the Activision Publishing business. Michael Morhaime will continue to serve as President and Chief
Executive Officer of Blizzard Entertainment. Thomas Tippl, currently Chief Financial Officer of Activision Publishing, will be appointed Chief Financial Officer of Activision Blizzard, and
Jean-François Grollemund, currently Chief Financial Officer of Vivendi Games, will be appointed Chief Accounting Officer of Activision Blizzard.

Tender Offer

Under the terms of the business combination agreement, within five (5) business days after the closing of the transaction, Activision Blizzard has agreed
to commence a cash self tender offer to purchase up to 146.5 million shares of its common stock (representing approximately 50% of the shares of Activision common stock outstanding immediately
prior to the transaction) at a purchase price of $27.50 per share.

The
tender offer will offer liquidity to Activision Blizzard stockholders at $27.50 per share, regardless of the then-current market price per share, subject to proration if the
tender offer is oversubscribed, and will allow Vivendi and any other non-tendering stockholders to increase their respective percentage ownership of Activision Blizzard. Activision
Blizzard stockholders will not be diluted by the tender offer except to the extent Vivendi purchases additional shares of Activision Blizzard as it is required to do if the aggregate tender offer
consideration exceeds $2.928 billion. In addition, the tender offer will allow participating Activision Blizzard stockholders to sell their shares at a premium to the market price of Activision
common stock at the time of the execution of the business combination agreement.

The
tender offer will not be subject to any minimum condition on the number of shares tendered. Subject to the other conditions of the tender offer being satisfied and the proration
described in the following sentence, Activision Blizzard will purchase any shares that are tendered even if the number of
shares tendered is less than 146.5 million shares, the maximum number of shares to be purchased in the tender offer. If the number of shares of Activision Blizzard common stock tendered is
greater than 146.5 million shares, Activision Blizzard will purchase the shares pro rata, which means that each stockholder who accepts the offer will have only a portion of such stockholder's
shares purchased by Activision Blizzard.

If
the maximum number of shares (146.5 million shares) is tendered in the offer, the aggregate purchase price for the shares of common stock purchased in the tender offer will be
approximately

16

$4.028 billion.
Under the terms of the business combination agreement, Activision and Vivendi have agreed the purchase of the shares tendered in the tender offer will be funded as follows:



the
first $2.928 billion of the aggregate consideration will be funded by Activision Blizzard with proceeds from the share purchase described above, available cash on
hand and, if necessary, borrowings made under one or more new credit facilities;



if
the aggregate consideration is more than $2.928 billion, Vivendi has agreed to purchase from Activision Blizzard, at a purchase price of $27.50 per share,
additional newly issued shares of Activision Blizzard common stock in an amount equal to the lesser of (a) $700 million and (b) the excess of the aggregate consideration over
$2.928 billion, which amount will be used to fund the amount of the aggregate consideration that is in excess of $2.928 billion; and



if
the aggregate consideration exceeds $3.628 billion, Activision Blizzard will fund the additional amount of the aggregate consideration that is in excess of
$3.628 billion (up to the maximum aggregate purchase price of $4.028 billion) through borrowings made under one or more new credit facilities issued by Vivendi or third party lenders.

For
a more complete description of the tender offer, see the section entitled "The Business Combination AgreementThe Tender Offer."

Conditions to Closing

The respective obligations of the parties to effect the transaction are subject to the satisfaction or, to the extent permitted under applicable laws and the
terms of the business combination agreement, waiver of a number of conditions, including, among other things, the following:



the
approval by Activision's stockholders of the principal terms of the business combination agreement and the transaction, including the issuance of shares of Activision
common stock in the transaction and the amendments to the certificate of incorporation and bylaws of Activision;



the
expiration or earlier termination of the waiting period under U.S. antitrust laws (which waiting period expired on January 16, 2008);



the
receipt of all approvals required from governmental authorities in the European Union as well as any other required regulatory approvals;



the
absence of any injunction, legal restraints or prohibitions preventing the consummation of the transaction; and



the
obtainment by Activision of one or more new credit facilities from either third party lenders or from Vivendi to fund a portion of the tender offer.

The
respective obligations of Activision and Merger Sub to effect the transaction are subject to the satisfaction or waiver of several additional conditions (any of which may be waived
in writing by Activision), including:



the
accuracy of representations and warranties of Vivendi, VGAC and Vivendi Games as of the closing date, other than those failures to be true and correct that would not
reasonably be expected to have a material adverse effect on Vivendi Games;



the
performance in all material respects by Vivendi, VGAC and Vivendi Games of the obligations required to be performed by each of them under the business combination
agreement at or prior to the closing date;



the
absence of any pending litigation, commenced by any stockholder of Vivendi or Vivendi Games after the date of the business combination agreement, against Vivendi, VGAC
or any of its directors before any governmental entity relating to (a) the business combination agreement,

17

(b) any
ancillary document thereto, or (c) the transactions contemplated by the business combination agreement or the ancillary documents thereto that would render it impossible or
unlawful to consummate the transaction;



the
taking of all necessary actions by Vivendi, VGAC and Vivendi Games to provide that, immediately prior to the closing of the transaction, (a) all intercompany
arrangements, other than licenses entered into in the ordinary course of business, between Vivendi and VGAC, on the one hand, and Vivendi Games and its subsidiaries, on the other hand, have been
terminated, and (b) all monies owed pursuant to such intercompany arrangements have been paid in full; and



the
delivery by Vivendi to Activision of executed copies of each of the ancillary documents to the business combination agreement to which either Vivendi, VGAC or Vivendi
Games is a party.

The
respective obligations of Vivendi, VGAC and Vivendi Games to effect the transaction are subject to the satisfaction or waiver of several additional conditions (any of which may be
waived in writing by Vivendi), including:



the
accuracy of representations and warranties of Activision and Merger Sub as of the closing date other than those failures to be true and correct that would not reasonably
be expected to have a material adverse effect on Activision;



the
performance in all material respects by Activision and Merger Sub of the obligations required to be performed by each of them under the business combination agreement at
or prior to the closing date;



the
absence of any pending litigation, commenced by any stockholder of Activision after the date of the business combination agreement, against Activision or any of its
directors before any governmental entity relating to (a) the business combination agreement, (b) any ancillary document thereto, or (c) the transactions contemplated by the
business combination agreement or the ancillary documents thereto that would render it impossible or unlawful to consummate the transaction; and



the
receipt of NASDAQ authorization for listing of the shares of Activision common stock to be issued to VGAC in connection with the merger and to Vivendi in connection with
the share purchase.

The
transaction is expected to be completed in the first half of calendar year 2008. However, it is possible that factors outside of the parties' control could require the parties to
complete the transaction at a later time or not to complete it at all. For a more complete discussion of the conditions to the transaction, see the section entitled "The Business Combination
AgreementConditions to the Transaction."

Restrictions on Recommendation Withdrawal

The business combination agreement generally restricts the ability of Activision's board of directors to withdraw its recommendation that Activision stockholders
approve the proposals set forth in this proxy statement. However, if Activision's board of directors determines in good faith (after consultation with its outside counsel) that the failure to withdraw
this recommendation would be reasonably expected to be a breach of its fiduciary duties under applicable law, then Activision's board of directors may withdraw its recommendation.

18

Restrictions on Solicitation of Third Party Acquisition Proposals

Activision has agreed not to, directly or indirectly, solicit or engage in discussions or negotiations with any person or group with respect to an Activision
acquisition proposal, which includes any offer relating to an acquisition, merger or other business combination that would result in such person or group acquiring more than a 20% interest in
Activision's total outstanding securities or a sale of more than 20% of the assets of Activision and its subsidiaries. The business combination agreement does not, however, prohibit Activision from
considering a bona fide acquisition proposal from a third party if certain specified conditions are met.

Each
of Vivendi and Vivendi Games has agreed not to, directly or indirectly, solicit or engage in discussions or negotiations with any person or group with respect to a Vivendi Games
acquisition proposal, which includes any offer relating to an acquisition, merger or other business combination that would result in the person or group acquiring more than a 20% interest in Vivendi
Games' total outstanding securities or a sale of more than 20% of the assets of Vivendi Games and its subsidiaries.

For
a discussion of the restrictions imposed on the solicitation of acquisition proposals from third parties, see the section entitled "The Business Combination
AgreementRestrictions on Solicitation of Acquisition Proposals" of this proxy statement.

Termination of the Business Combination Agreement

The business combination agreement may be terminated by mutual written consent of all parties at any time before the closing date. The business combination
agreement may also be terminated by either Activision or Vivendi if:



the
transaction is not completed on or before the ten (10) month anniversary of the execution of the business combination agreement;



any
law that makes the consummation of the transaction illegal in the United States or any foreign jurisdiction in which Activision or Vivendi has substantial business and
operations has been enacted, entered, enforced or deemed applicable to the transaction by a governmental entity;



a
governmental entity in the United States or any foreign jurisdiction in which Activision or Vivendi has substantial business and operations issues an order, decree or
ruling making the transaction illegal in the United States or any such foreign jurisdiction, and such order, decree or ruling has become final and non-appealable;



the
required approval of the Activision stockholders has not been obtained; or



the
other party breached any representation, warranty, covenant or agreement in the business combination agreement in a way that the related condition to closing would not
be satisfied, and this breach is not cured or is incurable prior to the ten (10) month anniversary of the execution of the business combination agreement.

In
addition, Vivendi may terminate the business combination agreement if:



Activision's
board of directors or any committee thereof withdraws (or modifies in a manner adverse to Vivendi in any material respect), or publicly proposes to withdraw (or
modify in a manner adverse to Vivendi in any material respect) its recommendation that Activision stockholders approve the proposals set forth herein, or publicly proposes to adopt or recommend any
Activision acquisition proposal; or



Activision's
board of directors fails to reaffirm publicly its recommendation that Activision stockholders approve the proposals set forth herein within ten
(10) business days following the commencement of a third-party tender or exchange offer for Activision's capital stock.

19

In
addition, Activision may terminate the business combination agreement in response to a superior proposal from a third party in compliance with the restrictions on solicitation
provisions discussed above.

Termination Fee and Expenses

Activision has agreed to pay to Vivendi a termination fee of $180 million if:



Vivendi
terminates the business combination agreement because Activision's board of directors withdraws (or modifies in a manner adverse to Vivendi in any material respect),
or publicly proposes to withdraw (or modify in a manner adverse to Vivendi in any material respect) its recommendation of the business combination agreement and the transaction, or publicly proposes
to adopt or recommend any Activision acquisition proposal;



Vivendi
terminates the business combination agreement because our board of directors fails to reaffirm publicly its recommendation of the business combination agreement and
the transaction within ten (10) business days following the commencement of a third-party tender or exchange offer for our capital stock;



Activision
terminates the business combination agreement in response to a superior proposal from a third party in compliance with the restrictions on solicitation provisions
discussed above; or



each
of the following has occurred: (a) prior to the special meeting, an Activision acquisition proposal has been made directly to Activision's stockholders or
has become publicly known, or any person has publicly announced an intention to make an Activision acquisition proposal; (b) thereafter, the business combination agreement is terminated by
either Vivendi or Activision because the Activision stockholder approval has not been obtained at a duly convened meeting; and (c) within twelve (12) months after such termination,
Activision enters into a definitive contract to consummate, or otherwise close, a transaction constituting an Activision acquisition proposal.

Under
specified conditions, Activision must also pay the actual and reasonably documented out-of-pocket expenses (including reasonable attorneys' fees) actually
incurred by Vivendi, VGAC and Vivendi Games in connection with the business combination agreement and the transaction, up to a maximum of $15 million. For more information, see the section
entitled "The Business Combination AgreementTermination; Termination Fees and Expenses."

Special Meeting

Stockholders Entitled to Vote; Vote Required

Unless adjourned or postponed, the special meeting of Activision stockholders will be held
on ,
, 2008
at , local
time, at . At the special meeting, you will be asked to approve the proposals described in this proxy
statement:

Proposal No. 1:

To approve the issuance of an aggregate of approximately 358.2 million new shares of Activision common stock in connection with the transaction.

Proposal No. 2:

To approve the amendment and restatement of our certificate of incorporation (including all related subproposals), subject to the completion of the transaction.

Proposal No. 3:

To approve the amendment of Section 7.4(a) of our bylaws, subject to the completion of the transaction.

20

Proposal No. 4:

To approve any motion to adjourn or postpone the special meeting to a later date or dates, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposals set forth
above.

You
may also be asked to act on other business, if any, that may properly come before the special meeting (or any adjournment or postponement thereof). We currently do not anticipate
that any other business will be presented at the special meeting.

Only
holders of record of shares of Activision common stock at the close of business on , 2008, which our board
of directors has set as the record date, are entitled to
notice of and to vote at the special meeting. As of the record date, there were shares of Activision
common stock outstanding and entitled to vote at the special meeting.

Approval
of the charter amendment proposal and the bylaw amendment proposal require the affirmative vote of the holders of a majority of the outstanding shares of Activision common stock
entitled to vote thereon. Approval of the share issuance proposal and the adjournment proposal will require the affirmative vote of the holders of a majority of the votes cast affirmatively or
negatively.

For
more information on the special meeting see the section of this proxy statement entitled "The Special Meeting."

Recommendations of the Board of Directors of Activision

After careful consideration, the Activision board of directors has unanimously approved the business combination agreement and has determined that the business
combination agreement and all related documents and exhibits thereto are in the best interest of Activision and its stockholders.

The
Activision board of directors unanimously recommends that the holders of Activision common stock vote:



"FOR" Proposal No. 1the issuance of shares of our common stock in connection with the transaction,

"FOR" Proposal No. 4adjournment of the special meeting, if necessary.

For
a more complete description of Activision's reasons for the transaction, see the section entitled "The TransactionActivision's Reasons for the Transaction and Tender
Offer."

Opinion of Activision's Financial Advisor

Activision's financial advisor, Allen & Company LLC, delivered a written opinion to the Activision board of directors to the effect that, as of
December 1, 2007, taking into account the transactions contemplated by the business combination agreement as a whole and subject to various qualifications and assumptions described in the
written opinion, the per share transaction price of the share purchase, the exchange ratio of the merger, and the per share transaction price of the tender offer were fair, from a financial point of
view, to Activision and its stockholders.

The
full text of the Allen & Company opinion, dated December 1, 2007, which sets forth the assumptions made, procedures followed, matters considered, and qualifications and
limitations on the review undertaken by Allen & Company in rendering its opinion, is attached as Annex D to this proxy statement. We urge you to read the opinion carefully and in its
entirety.

21

Allen &
Company provided its opinion for the use and benefit of our board of directors in connection with its consideration of the transactions contemplated by the business
combination agreement. The Allen & Company opinion addressed only the fairness, from a financial point of view, of the per share
transaction price of the share purchase, the exchange ratio of the merger, and the per share transaction price of the tender offer as of the date of the Allen & Company opinion. The
Allen & Company opinion is not intended to be and does not constitute a recommendation to any stockholder as to how that stockholder should vote or act with respect to the transactions
contemplated by the business combination agreement or any other matter described in this proxy statement. Allen & Company was not requested to opine as to, and its opinion does not in any
manner address, Activision's underlying business decision to proceed with or effect the transactions contemplated by the business combination agreement. The summary of the Allen & Company
opinion in this proxy statement is qualified in its entirety by reference to the full text of the opinion.

For
a more complete description of the Allen & Company opinion, see the section entitled "The TransactionOpinion of Activision's Financial Advisor." See also
Annex D to this proxy statement.

Interests of Directors and Executive Officers in the Transaction

In considering the recommendations of the Activision board of directors with respect to the business combination agreement and the transaction, you should be
aware that certain executive officers and directors of Activision have interests in the transaction that may be different from, or in addition to, the interests of Activision stockholders generally.
These interests include:



the
rights of certain officers to receive payments or other benefits, including grants of equity awards and the modification of vesting schedules of existing options,
following the completion of the transaction;



the
continuing service of several of Activision's existing directors and executive officers in the combined company after the closing date;



the
amendment of employment arrangements with certain of Activision's executive officers to provide incentives for their continued service to the combined company after the
closing date; and



the
continued indemnification of Activision's directors post-closing.

The
Activision board of directors was aware of these interests and considered them, among other things, in making its recommendation that Activision stockholders vote for the approval of
the share issuance proposal, the charter amendment proposal and the bylaw amendment proposal.

Other Matters

Risk Factors

In evaluating the business combination agreement, the transaction and, in particular, the issuance of new shares of Activision common stock in connection with the
transaction and the tender offer, Activision stockholders should carefully read this proxy statement and especially consider the factors discussed in the section entitled "Risk Factors."

Rights Plan Amendment

On April 18, 2000, Activision's board of directors approved a stockholders rights plan, pursuant to which each common stockholder at the close of business
on April 19, 2000 received a dividend of one right for each share of common stock held. Activision has amended the rights plan concurrent with the execution of the business combination
agreement to provide that (a) the rights plan will not be triggered by the business combination agreement or the transaction and (b) the rights plan will

22

terminate
upon the completion of the transaction and all rights existing under the rights plan will be extinguished.

For
a more complete discussion of the rights plan amendment, see the section entitled "The TransactionRights Plan Amendment" of this proxy statement.

Listing of Common Stock

Application will be made to have the new shares of Activision common stock to be issued in connection with the transaction (including shares acquired by Vivendi
as required to finance the tender offer) approved for listing on The NASDAQ National Market, which is referred to in this proxy statement as "NASDAQ."

Material United States Federal Income Tax Consequences

Activision stockholders will not recognize any gain or loss for United States federal income tax purposes as a result of (a) the consummation of the
transaction or (b) an adoption of the proposed amendments to Activision's certificate of incorporation. See the section entitled "The TransactionMaterial United States Federal
Income Tax Consequences."

Accounting Treatment of the Transaction

The transaction will be accounted for as a reverse acquisition under the purchase method of accounting under U.S. GAAP. For this purpose, Vivendi Games
will be deemed to be the accounting acquiror and Activision will be deemed to be the accounting acquiree. Accordingly, Activision Blizzard will account for the transaction as a purchase business
combination, using Vivendi Games' historical financial information and accounting policies and applying fair value estimates to the acquired assets, liabilities and commitments of Activision as of the
date of the transaction.

No Appraisal Rights

Under Section 262 of the General Corporation Law of the State of Delaware, which is referred to in this proxy statement as the "DGCL," Activision
stockholders do not have appraisal rights in connection with the transaction.

Regulatory Matters

Activision and Vivendi are required, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or the HSR Act, to notify and furnish required
information to the Antitrust Division of the U.S. Department of Justice and to the U.S. Federal Trade Commission prior to completing the transaction. Activision and Vivendi have made these filings and
the waiting period under the HSR Act has expired.

In
addition, the transaction is subject to, and the parties' obligations to effect the transaction are conditioned on, approval by governmental authorities in the European Union.

For
a more complete discussion of the regulatory matters relating to the transaction, see the section entitled "The TransactionU.S. Federal or State and Foreign Regulatory
Matters" of this proxy statement.

23

Per Share Market Price Data

Activision common stock trades on NASDAQ under the symbol "ATVI." The following table shows the high and low closing sale prices in U.S. dollars for Activision
common stock for the periods indicated, as reported on NASDAQ after adjustments to account for any subsequent dividends or stock splits. The prices reflect inter-dealer prices and do not include
retail markups, markdowns or commissions.

The
closing sale price of Activision common stock as reported on NASDAQ on November 30, 2007, the last business day prior to the public announcement of the proposed transaction,
was $22.15 per share. The closing sale price of Activision common stock as reported on NASDAQ on , 2008,
the record date for the Activision special meeting, was
$ per share. As of that date, there were holders of record of Activision common stock based on
information provided by Activision's transfer agent.

High

Low

Calendar Year 2006

First Quarter

$

15.69

$

11.91

Second Quarter

14.92

10.75

Third Quarter

15.57

10.72

Fourth Quarter

17.94

14.27

Calendar Year 2007

First Quarter

$

19.01

$

16.26

Second Quarter

21.27

18.43

Third Quarter

21.59

17.11

Fourth Quarter

29.70

18.92

Calendar Year 2008

First Quarter (through January 29, 2008)

$

28.43

$

26.23

Activision
has never paid cash dividends on its common stock and has no present plans to do so. Activision expects that earnings will be retained for the continued growth and development
of the business. Future dividends, if any, will depend on Activision's (or, following completion of the transaction, Activision Blizzard's) earnings, financial condition, cash requirements, future
prospects, and other factors deemed relevant by our board of directors.

Vivendi
Games is a privately-held company. Accordingly, per share historical data of Vivendi Games is omitted.

24

Selected Historical Financial Data of Activision

The following selected historical financial data as of and for each of the years in the five-year period ended March 31, 2007 has been derived
from Activision's audited consolidated financial statements. The following selected historical financial data for the six months ended September 30, 2007 and 2006, and as of
September 30, 2007 has been derived from Activision's unaudited interim consolidated financial statements. In the opinion of Activision's management, the unaudited interim consolidated
financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the interim consolidated financial statements. Results for the
interim periods are not necessarily indicative of the results to be expected for the full year.

This
selected information is only a summary and you should read it together with Activision's historical consolidated financial statements and the related notes thereto included
elsewhere in this proxy statement.

Six Months Ended September 30,

Year Ended March 31,

2007

2006

2007

2006

2005

2004

2003

(in thousands, except per share data)

(unaudited)

Summary Operating Data

Net revenues

$

813,201

$

376,241

$

1,513,012

$

1,468,000

$

1,405,857

$

947,656

$

864,116

Cost of sales

532,916

278,878

978,065

940,362

844,946

567,147

565,173

Operating income (loss)

20,547

(70,859

)

73,147

15,226

179,608

104,537

84,691

Income (loss) before tax provision

44,241

(54,552

)

109,825

45,856

192,700

110,712

93,251

Net income (loss)

28,524

(42,611

)

85,787

40,251

135,057

74,098

59,003

Basic earnings (loss) per share(1)

0.10

(0.15

)

0.31

0.15

0.54

0.31

0.23

Diluted earnings (loss) per share(1)

0.09

(0.15

)

0.28

0.14

0.49

0.29

0.21

Basic weighted average common shares outstanding(1)

285,450

279,487

281,114

273,177

250,023

236,887

256,639

Diluted weighted average common shares outstanding(1)

312,510

279,487

305,339

294,002

277,712

258,350

277,620

As of March 31,

As of September 30, 2007

2007

2006

2005

2004

2003

(in thousands)

(unaudited)

Summary Balance Sheet Data

Total assets

$

1,961,200

$

1,793,947

$

1,418,255

$

1,305,919

$

966,220

$

703,070

Total liabilities

431,650

382,415

195,632

208,645

136,079

107,076

Cash, cash equivalents and short term investments

961,760

954,849

944,960

840,864

587,649

406,954

Capitalized software development and intellectual property licenses

226,459

231,196

147,665

127,340

135,201

107,921

Goodwill

280,248

195,374

100,446

91,661

76,493

68,019

Working capital

1,053,559

1,060,064

922,199

913,819

675,796

422,500

Long term debt











2,671

Shareholders' equity

1,529,550

1,411,532

1,222,623

1,097,274

830,141

595,994

(1)

Consolidated
financial information for fiscal years 2005-2003 reflects the restated amounts for the effect of Activision's four-for-three stock
split effected in the form of a 331/3% stock dividend to shareholders of record as of October 10, 2005, paid October 24, 2005.

25

Selected Historical Financial Data of Vivendi Games

The following selected historical financial data as of and for each of the years in the five-year period ended December 31, 2006, has been
derived from Vivendi Games audited consolidated financial statements. The following selected historical financial data for the nine months ended September 30, 2007 and 2006 and as of
September 30, 2007 has been derived from Vivendi Games' unaudited interim consolidated financial statements. In the opinion of Vivendi Games' management, the unaudited interim consolidated
financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of its financial position and results of operations for such periods.
Interim results for the nine months ended September 30, 2007, are not necessarily indicative of, and are not projections for, the results to be expected for the full year ending
December 31, 2007.

This
selected information below is only a summary and you should read it together with Vivendi Games' historical consolidated financial statements and the notes related thereto included
elsewhere in this proxy statement.

"Cash
and cash equivalents on hand" reflect cash balances not transferred to Vivendi via a cash pooling agreement at the end of the applicable period. See note 11 to the
Vivendi Games historical consolidated financial statements for more information about the cash pooling agreement.

(2)

Net
cash transfers under a cash pooling agreement with Vivendi are included in owner's equity as part of net transfers to Vivendi.

26

Summary Unaudited Pro Forma Condensed Combined Financial Data

The following summary unaudited pro forma condensed combined financial data has been derived from and should be read together with the unaudited pro forma
condensed combined financial information and accompanying notes. This information is based on the historical consolidated balance sheets and statements of operations of both Activision and Vivendi
Games which have been presented elsewhere in this proxy statement. The transaction will be accounted for as a reverse acquisition under the purchase method of accounting. For this purpose, Vivendi
Games will be deemed the accounting acquiror, and Activision will be deemed the accounting acquiree. The unaudited pro forma condensed combined financial information is based on estimates and
assumptions set forth in the notes to such statements, which estimates are preliminary and have been made solely for the purposes of developing such pro forma information.

The
unaudited pro forma condensed combined statements of operations for the nine month period ended September 30, 2007, and for the year ended December 31, 2006, give
effect to the transaction as if it had occurred on January 1, 2006. The unaudited pro forma balance sheet assumes that the transaction took place on September 30, 2007, and combines
Activision's historical consolidated balance sheet as of September 30, 2007, with Vivendi Games' historical balance sheet as of September 30, 2007.

The
adjusted pro forma information assumes the repurchase of 146.5 million Activision Blizzard common shares at $27.50 per share, representing the maximum number of shares to be
purchased under the cash tender offer commencing within five (5) business days after closing the transaction. The unaudited adjusted pro forma condensed combined statements of operations for the nine
month period ended September 30, 2007, and for the year ended December 31, 2006, give effect to the tender offer as if it had occurred on January 1, 2006. The unaudited adjusted
pro forma condensed combined balance sheet assumes that the tender offer took place on September 30, 2007. Actual shares purchased could be less than 146.5 million which would impact the
adjusted pro forma amounts for the nine month period ended September 30, 2007, for the year ended December 31, 2006, and as of September 30, 2007.

The
businesses may have performed differently had they been combined during the periods presented. Therefore, the unaudited pro forma condensed combined financial information is not
necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that Activision Blizzard will experience after the
transaction and tender offer are consummated.

Nine Months Ended September 30, 2007(1)

Year Ended December 31, 2006(1)

(in thousands, except per share data)
(unaudited)

Pro Forma Statement of Operations:

Net sales

$

2,088,477

$

2,530,668

Net income (loss)

66,559

(90,656

)

Net income (loss) per share:

Basic

0.10

(0.14

)

Diluted

0.10

(0.14

)

Adjusted Pro Forma Statement of Operations(2):

Net sales

$

2,088,477

$

2,530,668

Net income (loss)

29,368

(133,469

)

Net income (loss) per share:

Basic

0.06

(0.26

)

Diluted

0.05

(0.26

)

27

Pro Forma as of September 30, 2007

Adjusted
Pro Forma as of September 30, 2007(2)

(in thousands)
(unaudited)

Balance Sheet:

Total assets

$

12,420,841

$

9,945,994

Working capital

2,604,228

129,381

Long term debt



853,153

Shareholders' equity

10,953,171

7,625,171

(1)

The
unaudited pro forma condensed combined statement of operations for the year ended December 31, 2006 combines the full year ended March 31, 2007 for Activision with
the full year ended December 31, 2006 for Vivendi Games. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2007 combines the nine
months ended September 30, 2007 for Activision with the nine months ended September 30, 2007 for Vivendi Games. For this purpose, Activision's statement of operations for the period
January 1, 2007 to March 31, 2007 was added to the statement of operations for the six months ended September 30, 2007. Therefore, the statement of operations for the period
January 1, 2007 to March 31, 2007 has been presented in both the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2007, and
the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2006. Activision's net revenues and net loss for the three months ended March 31, 2007
were $312.5 million and $14.4 million, respectively.

(2)

Adjusted
financial data reflect the repurchase of 146.5 million Activision Blizzard common shares at $27.50 per share, representing the maximum amount of shares to be purchased
under the cash tender offer. Actual shares purchased could be less than 146.5 million shares which would impact the adjusted pro forma amounts. Adjusted financial data also assume the issuance
of 25.5 million Activision Blizzard common shares to Vivendi and additional borrowings required to finance the tender offer. See the sections entitled "The Business Combination
AgreementThe Share Purchase" and "The Business Combination AgreementThe Tender Offer."

Please
see "Unaudited Pro Forma Condensed Combined Financial Information" for a description of the accounting treatment of the transaction, the unaudited pro forma condensed combined
financial statements and notes thereto, and the pro forma adjustments to the historical financial information of Activision and Vivendi Games showing the effect of the transaction and tender offer
contemplated by the business combination agreement.

28

Comparative Per Share Data

The following tables set forth the Activision historical net income (loss) per share for the six months ended September 30, 2007 and the year ended
March 31, 2007, and the book value per share as of September 30, 2007, and for Activision Blizzard on an unaudited pro forma combined basis for the nine months ended September 30,
2007 and the year ended December 31, 2006, and as of September 30, 2007.

The
pro forma combined data were derived from and should be read together with the unaudited pro forma condensed combined financial statements and accompanying notes. This information is
based on the historical consolidated balance sheets and related adjusted historical consolidated statements of operations of Activision and Vivendi Games. The pro forma combined data give effect to
the transaction using the purchase method of accounting for business combinations as a reverse acquisition in which Vivendi Games will be deemed to be the accounting acquiror of Activision while the
adjusted pro forma combined data additionally assume the repurchase of 146.5 million Activision Blizzard common shares at $27.50 per share, representing the maximum number of shares to
be repurchased under the cash tender offer commencing within five business days after closing the transaction.

The
businesses may have performed differently had they been combined during the periods presented. You should not rely on the selected unaudited pro forma combined per share data as
being indicative of the historical results that would have been achieved had the businesses been combined during the periods presented or the results that Activision Blizzard will experience after the
transaction.

Activision's
historical data were derived from and should be read together with the consolidated financial statements and accompanying notes included elsewhere in this proxy statement.

Vivendi
Games is a privately-held company. Accordingly, per share historical data for Vivendi Games are omitted.

Six Months Ended September 30, 2007

Year Ended March 31, 2007

(unaudited)

Activision's Historical Data

Net income per share:

Basic

$

0.10

$

0.31

Diluted

$

0.09

$

0.28

As of September 30, 2007:

Consolidated book value per share

$

5.29

Nine Months Ended September 30, 2007

Year Ended December 31, 2006

(unaudited)

Pro Forma Combined Data

Pro forma net income (loss) per share(1):

Basic

$

0.10

$

(0.14

)

Diluted

$

0.10

$

(0.14

)

Adjusted pro forma net income (loss) per share(2):

Basic

$

0.06

$

(0.26

)

Diluted

$

0.05

$

(0.26

)

As of September 30, 2007:

Pro forma book value per share(3)

$

16.92

Adjusted pro forma book value per share(3)

$

14.49

29

(1)

Pro
forma net income (loss) per share was calculated by dividing pro forma net income (loss) by the pro forma weighted average common shares outstanding as if the transaction had
occurred on January 1, 2006.

(2)

Represents
adjusted pro forma net income (loss) per share, resulting from the repurchase of 146.5 million Activision Blizzard common shares at $27.50 per share, representing
the maximum number of shares to be repurchased under the tender offer as if the tender offer had occurred on January 1, 2006. Actual shares repurchased could be less than 146.5 million
which would impact the adjusted pro forma net income (loss) per share for the nine months ended September 30, 2007, and for the year ended December 31, 2006.

(3)

Pro
forma book value per share and adjusted pro forma book value per share are computed assuming the transaction and tender offer had occurred on September 30, 2007.

30

RISK FACTORS

In addition to the other information included in this proxy statement and found in the Annexes attached hereto, including the matters
addressed in the section entitled "Cautionary Statement Concerning Forward-Looking Statements," you should carefully consider the following risk factors before deciding whether to vote for the
approval of the proposals and subproposals presented in this proxy statement. Additional risks and uncertainties not presently known to us or that are not currently believed to be material, if they
occur, also may adversely affect the proposed transaction and the combined company, Activision Blizzard, following the completion of the transaction.

Risks Related to the Transaction

Although we expect that our combination with Vivendi Games will result in benefits to Activision, we may not realize those benefits because of
integration difficulties and other challenges.

The success of our combination with Vivendi Games will be dependent in large part on the success of the management of the combined company in integrating the
operations, technologies and personnel of the two companies following the completion of the transaction. The failure of the combined company to meet the challenges involved in successfully integrating
the operations of Activision and Vivendi Games or to otherwise realize any of the anticipated benefits of the transaction, including additional revenue opportunities, could impair the results of
operations of the combined company. In addition, the overall integration of the companies is a complex, time-consuming and expensive process that, without proper planning and effective and
timely implementation, could significantly disrupt the businesses of Activision and Vivendi Games.

The
combined company may not successfully integrate the operations of Activision and Vivendi Games in a timely manner, or at all, and the combined company may not realize the anticipated
benefits or synergies of the transaction to the extent, or in the timeframe, anticipated. The anticipated benefits and synergies include cost savings associated with anticipated restructurings and
other operational efficiencies, greater economies of scale and revenue enhancement opportunities. However, these anticipated benefits and synergies assume a successful integration and are based on
projections, which are inherently uncertain, and other assumptions. Even if integration is successful, anticipated benefits and synergies may not be achieved.

31

Vivendi will own between 52.2% and 68.0% of Activision Blizzard's outstanding shares of common stock after completion of the transaction and the
post-closing tender offer.

Immediately upon closing of the transaction, Vivendi and its subsidiaries are expected to own approximately 52.2% of our issued and outstanding shares of common
stock on a fully diluted basis. If the maximum number of our shares is tendered in the tender offer, Vivendi and its subsidiaries are expected to own approximately 68.0% of our issued and outstanding
shares of common stock on a fully diluted basis. See the section entitled "The Business Combination AgreementThe Tender Offer" for a more detailed discussion.

As
a result of the transaction, Vivendi will have the ability to nominate a majority of the combined company's board of directors and determine the outcome of certain matters submitted
to Activision Blizzard's stockholders, such as the approval of significant transactions. As a result, actions that may be supported by a majority of the other stockholders could be blocked by Vivendi.
In addition, Vivendi's ownership could affect the liquidity in the market for the combined company's common stock.

Furthermore,
the ownership position and governance rights of Vivendi would likely discourage a third party from proposing a change of control or other strategic transaction concerning
Activision Blizzard. As a result, the Activision Blizzard common stock could trade at prices that do not reflect a "control premium" to the same extent as do the stocks of similarly situated companies
that do not have a stockholder with an ownership interest as large as Vivendi's ownership interest.

Some of our current directors and executive officers have interests in the transaction that may differ from your interests as a stockholder and these
persons may have conflicts of interest in recommending you approve the proposals set forth in this proxy statement.

In considering whether to approve the proposals and subproposals set forth in this proxy statement, you should recognize that some of the members of management
and our board of directors may have interests in the transaction that differ from, or are in addition to, their interests as stockholders. These interests include:



the
rights of certain officers to receive payments or other benefits, including grants of equity awards and the modification of vesting schedules of existing options,
following the completion of the transaction;



the
continuing service of several of Activision's existing directors and executive officers in the combined company after the closing date;



the
amendment of employment arrangements with certain of Activision's executive officers to provide incentives for their continued service to the combined company after the
closing date; and



the
continued indemnification of Activision's directors post-closing.

These
interests are described in greater detail in the sections entitled "The TransactionInterests of Activision's Executive Officers and Directors in the Transaction,"
"Board and Management of Activision Blizzard" and "Corporate Governance of Activision Blizzard."

The completion of the transaction is subject to the receipt of consents and approvals from government entities that may not be received or that may
impose conditions that could have an adverse effect on the combined company following the completion of the transaction.

We cannot complete the transaction unless we receive various consents, orders, approvals and clearances from antitrust and other authorities in the United States
and the European Union. Activision and Vivendi have made the required filings under the HSR Act and the applicable waiting period has expired. However, we have yet to receive the requisite regulatory
approvals from European

32

Union
authorities and there can be no assurance that we will receive such approvals. In addition, these authorities may impose conditions on the completion of the transaction or require changes to the
terms of the business combination agreement. For example, the European Union may require divestiture of certain assets as a condition to the closing of the transaction. Neither we nor Vivendi is
obligated to agree to divest material assets as a condition of the closing of the transaction. While we do not currently expect that any such conditions or changes would be imposed, there can be no
assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the transaction or imposing additional costs on or limiting the revenues of the combined
company, any of which may have an adverse effect on us following the completion of the proposed transaction. See the sections entitled "The TransactionU.S. Federal or State and Foreign
Regulatory Matters" and "The Business Combination AgreementConditions to the Transaction" for a more detailed discussion.

Subject to certain limitations, Vivendi may sell common stock at any time following the completion of the transaction, which could cause our stock price
to decrease.

The sale of shares of common stock that Vivendi and its subsidiaries receive in the transaction or to fund the tender offer will be restricted, but Vivendi may
sell these shares under certain circumstances, including pursuant to a registered underwritten public offering under the Securities Act of 1933, as amended, or in accordance with Rule 144 under
the Securities Act. We have entered into an investor agreement with Vivendi, which includes registration rights and which will give Vivendi the right 120 days after the closing date to require
us to register all or a portion of its shares at any time, subject to certain limitations. The sale of a substantial number of shares of common stock by Vivendi or by our other stockholders within a
short period of time could cause our stock price to decrease, and make it more difficult for us to raise funds through future offerings of common stock.

If the amendment to our certificate of incorporation to increase the number of authorized shares of common stock is approved and the transaction is
completed, we will be able to issue more shares of common stock than currently authorized. As a result, such future issuances of common stock could have a dilutive effect on the earnings per share and
voting power of Activision Blizzard stockholders.

If
the amendment to our certificate of incorporation to increase the number of authorized shares of common stock is approved by stockholders and the transaction is completed, we will be
able to issue more shares of common stock than currently authorized. If the board of directors elects to issue additional shares of common stock in the future, whether in public offerings, in
connection with mergers and acquisitions, or otherwise, such additional issuances could dilute the earnings per share and voting power of Activision Blizzard stockholders.

The transaction is subject to conditions, including certain conditions that may not be satisfied, and may not be completed on a timely basis, or at all.
Failure to consummate the transaction could have material and adverse effects on Activision.

The
completion of the transaction is subject to a number of conditions. See the section entitled "The Business Combination AgreementConditions to the Transaction" for a more
detailed discussion. Therefore, the completion and timing of completion of the transaction is uncertain. If the transaction is not completed on a timely basis, or at all, our ongoing business may be
adversely affected and, without realizing any of the benefits of having completed the transaction, we will be subject to a number of risks, including the following:



we
may be required to pay a termination fee of $180 million if the transaction is terminated under certain circumstances, as described in the business combination
agreement;



we
will be required to pay certain costs relating to the transaction, such as legal, accounting, financial advisor and printing fees, whether or not the transaction is
completed; and

33



matters
relating to the transaction (including integration planning) may require substantial commitments of time and resources by our management, which could otherwise have
been devoted to other opportunities that may have been beneficial to us.

In
addition, we could also be subject to litigation related to any failure to complete the transaction. If the transaction is not completed on a timely basis, or at all, these risks may
materialize and may adversely affect our business, financial results and stock price.

Risks Related to Activision's Business

SEC investigation and litigation relating to stock options remain pending and may adversely affect our business and results of operations.

Although the special subcommittee of independent members of our board of directors established in July 2006 to review our historical stock option granting
practices, which we refer to as the special subcommittee, has completed its review of those practices and our stock option grants made in the period between 1992 and 2006, a formal investigation by
the SEC relating to our stock option granting practices remains pending, as does derivative litigation against us and certain of our current and former directors and officers. Although we believe that
we have taken appropriate action by restating our financial statements through the fiscal year ended March 31, 2006, as filed in our amended Annual Report on Form 10-K/A on
May 25, 2007, and made appropriate disclosures for matters relating to stock options, the SEC (or the court in the derivative actions) may disagree with the findings of the special subcommittee
or with the manner in which we have accounted for and reported, or not reported, the financial impact of past option grant measurement date errors. If so, we may need to further restate our prior
financial statements, further amend our filings with the SEC, or take other actions not currently contemplated. In addition, these proceedings are likely to result in additional legal expense that may
affect our results in future periods, and may also result in diversion of management attention and other resources, as well as fines, penalties, damages and other sanctions. These eventualities could
materially and adversely affect our business and results of operations. We cannot currently predict the ultimate outcome of these proceedings.

We depend on a relatively small number of brands for a significant portion of our revenues and profits.

A significant portion of our revenues is derived from products based on a relatively small number of popular brands each year, and these products are responsible
for a disproportionate amount of our profits. In addition, many of these products have substantial production or acquisition costs and marketing budgets. In fiscal 2007, 39% of our consolidated net
revenues (and 52% of our worldwide publishing net revenues) was derived from three brands, which accounted for 17%, 13%, and 9% of consolidated net revenues, respectively (and 23%, 18%, and 11% of
worldwide publishing net revenues, respectively). In fiscal 2006, 30% of our consolidated net revenues (and 38% of our worldwide publishing net revenues) was derived from three brands, which accounted
for 14%, 8%, and 8% of consolidated net revenues, respectively (and 18%, 10%, and 10% of our worldwide publishing net revenues, respectively). We expect that a limited number of popular brands will
continue to produce a disproportionately large amount of our revenues and profits. Due to this dependence on a limited number of brands, the failure to achieve anticipated results by one or more
products based on these brands may significantly harm our business and financial results.

Sales of certain titles such as Guitar Hero are affected by hardware peripheral availability.

Some of our titles involve a separate hardware peripheral, such as the guitar in Guitar Hero. Typically, we sell
such software both in bundles with the hardware peripheral and on a stand-alone basis. Consumers may not want to buy such game software if they cannot also buy the hardware peripheral. If we
underestimate demand or otherwise are unable to produce sufficient quantities of the hardware peripheral or allocate too few peripherals to geographic markets and hardware platforms

34

where
demand exceeds supply, we will forego revenue. This may also create greater opportunities for competitors to develop or gain market share with competitive product offerings. If we overestimate
demand and make too many peripherals, or allocate too many peripherals to geographic markets and hardware platforms where there is insufficient demand, we will incur unrecoverable manufacturing costs
for unsold units as well as for unsold game software. In either case, hardware peripheral manufacturing and allocation decisions may negatively affect our financial performance.

There
are a limited number of manufacturers who are authorized by Sony, Nintendo or Microsoft to make the hardware peripherals for Guitar
Hero, and the majority of those manufacturers are located in China. Anything that adversely impacts the ability of those manufacturers to produce the hardware peripheral for
us, including without limitation the revocation of the first party license to produce the hardware, the utilization of such manufacturer's capacity by one or our competitors, or issues generally
negatively impacting international companies operating in China, will adversely impact our ability to supply those peripherals to the market.

Our sales may decline substantially without warning and in a brief period of time because a majority of our sales are made to a relatively small number
of key customers and because we do not have long-term contracts for the sale of our products.

In the United States and Canada, we primarily sell our products on a direct basis to mass-market retailers, consumer electronics stores, discount
warehouses, and game specialty stores. Our products are sold internationally on a direct-to-retail basis, through third-party distribution and licensing arrangements and
through our wholly-owned European distribution subsidiaries. Our sales are made primarily on a purchase order basis without long-term agreements or other forms of commitments. Our largest
customers, Wal-Mart and GameStop, accounted for approximately 22% and 8%, respectively, of our consolidated net revenues for the fiscal year ended March 31, 2007 and approximately
22% and 10% of our consolidated net revenues for the fiscal year ended March 31, 2006. The loss of, or significant reduction in sales to, any of our principal retail customers or distributors
could significantly harm our business and financial results. The concentration of sales in a small number of large customers also could make us more vulnerable to collection risk if one or more of
these large customers became unable to pay for our products. In addition, having such a large portion of our total net revenue concentrated in a few customers reduces our negotiating leverage with
these customers.

We may not be able to maintain our distribution relationships with key vendors and customers.

Our CD Contact, NBG, and Centresoft subsidiaries distribute interactive entertainment software and hardware products and provide related services in the Benelux
countries, Germany, and the United Kingdom, respectively, and via export in other European countries for a variety of entertainment software publishers, many of which are our competitors, and hardware
manufacturers. From time to time, they also maintain exclusive relationships to serve certain retail customers. These services are generally performed subject to limited-term arrangements.
Although we expect to use reasonable efforts to retain these vendors and retail customer relationships, we may not be successful in this regard. The cancellation or non-renewal of one or
more of these arrangements could adversely affect business and financial results.

Risks Related to the Vivendi Games Business

Vivendi Games is dependent on Blizzard's World of Warcraft franchise.

The majority of Vivendi Games' total net sales are derived from Blizzard's World of Warcraft franchise. For the
nine month period ended September 30, 2007, and the years ended December 31, 2006 and 2005, Blizzard's World of Warcraft titles accounted
for approximately 85%, 62%, and 48%, respectively, of Vivendi Games' total net sales. Vivendi Games is the current leading global developer, publisher and distributor in terms of subscriber base and
revenues in the subscription-based MMORPG

35

category,
due to the popularity of World of Warcraft and related expansion packs. To remain the leader in the MMORPG category, it is important that
Vivendi Games continue to refresh World of Warcraft or develop new MMORPG products that are favorably received by its existing customer base and new
customers. A number of software publishers have developed and commercialized or are currently developing online games for use by consumers over the Internet which pose a threat to the popularity of World of
Warcraft, and Vivendi Games expects new competitors to continue to emerge in the MMOG category. If consumer demand for World of Warcraft games declines and Vivendi Games has not
introduced new MMOG or other products that replace World of
Warcraft's potentially decreasing revenue, or added other sources of revenue, Vivendi Games' financial condition could suffer. Additionally, if new technologies are developed
that replace MMOG games, if consumer preferences trend away from MMOG games or if new business models emerge that offer online subscriptions for free or at a substantial discount to current MMOG
subscription fees, Vivendi Games' revenue and profitability will decline.

The development of MMOG products requires substantial up-front expenditures. Vivendi Games may not be able to recover development costs for
its future MMOG products.

Consumer preferences for games are usually cyclical and difficult to predict, and even the most successful titles remain popular for only limited periods of time,
unless refreshed with new content. In order to remain competitive in the MMOG market, Vivendi Games must continuously develop new products and enhancements to existing products. Because of the
significant complexity of MMOG games, these products require a longer development time and are more expensive to create than traditional console game products. In addition, the long lead time involved
in developing a MMOG product and the significant allocation of financial resources that each product requires means it is critical that Vivendi Games accurately predict consumer demand for new MMOG
products. While World of Warcraft's popularity allowed it to recoup its production costs, if future MMOG products do not achieve expected market
acceptance or generate sufficient sales and subscription revenues upon introduction, Vivendi Games may not be able to recover the development and marketing costs associated with new products, and its
financial results could suffer.

A substantial portion of Vivendi Games' revenues are derived from subscriptions paid by World of Warcraft subscribers. If these customers cancel their
subscriptions, Vivendi Games' financial condition could suffer.

A substantial portion of Vivendi Games' revenues are generated by subscription fees paid by consumers who play World of
Warcraft. Typically, World of Warcraft subscribers purchase one (1) to three (3) month memberships that are cancellable, without
penalty, at the end of the membership period. If World of Warcraft subscribers become dissatisfied, they may chose not to renew their memberships in
order to engage in other forms of entertainment (including competing MMOG offerings) and Vivendi Games may not be able to replace lost subscribers. Additionally, if general economic conditions
decline, consumers may decrease their discretionary spending on entertainment items such as MMOG games and users may choose not to renew their World of
Warcraft subscriptions. A decrease in the overall subscription base of World of Warcraft could substantially harm Vivendi Games'
operating results.

Vivendi Games depends on servers to operate its MMORPG business. If Vivendi Games were to lose server capacity, for any reason, its business could
suffer.

Vivendi Games' business relies on the continuous operation of its data servers. Any broad based catastrophic server malfunction, a significant intrusion by
hackers that circumvents its security measures, or a failure of Vivendi Games' disaster recovery service would likely interrupt the operation of Vivendi Games' MMORPG games and could result in the
loss of subscription-based sales. An extended interruption of service could harm Vivendi Games' goodwill and operating results.

36

Vivendi
Games must project its future server needs and make advance purchases of servers to accommodate expected business demands. If Vivendi Games underestimates the amount of server
capacity its business requires or if Vivendi Games' business were to grow more quickly than expected, Vivendi Games' customers may experience service problems, such as slow or interrupted gaming
access. Insufficient server capacity may result in Vivendi Games' experiencing decreased sales, a loss of its customer base, and adverse consequences to its reputation and goodwill. Conversely, if
Vivendi Games overestimates the amount of server capacity required by its business, Vivendi Games may incur additional operating costs that it would affect its operating margins.

Vivendi Games may not accurately predict the amount of bandwidth necessary to sustain its business.

Vivendi Games' online gaming businesses is dependent on the availability of sufficient Internet bandwidth. An increase in the price of bandwidth could have an
adverse effect on operating margins since Vivendi Games may not be able to increase its prices or subscriber levels to compensate for such costs. Because of the importance of its MMORPG business,
Vivendi Games' ability to access adequate bandwidth to support its business is critical. To secure bandwidth access, Vivendi Games has entered into arrangements with several bandwidth providers and
entered into long-term contracts with some of them to secure future bandwidth capacity. If the price of bandwidth were to decrease, Vivendi Games' contractual commitment to pay higher
prices could affect Vivendi Games' ability to compete with other video game producers.

Conversely,
since Vivendi Games purchases additional bandwidth based on anticipated growth, its bandwidth capacity is sometimes larger than necessary to sustain its existing needs. If
Vivendi Games' projected online business growth is delayed or does not occur, Vivendi Games will incur larger bandwidth expenses than necessary. If Vivendi Games underestimates the amount of bandwidth
that its online business requires, and its purchased bandwidth capacity is insufficient to meet demand, Vivendi Games' business and reputation may suffer.

Vivendi Games' results of operations or reputation may be harmed as a result of offensive consumer posted content.

Vivendi Games is subject to risks associated with World of Warcraft's collaborative online features, specifically
its online chat feature. Consumers may post narrative comment, in real time, onto World of Warcraft's gaming sites that is visible to other users.
Despite Vivendi Games' efforts to police and restrict inappropriate consumer content, from time to time objectionable and offensive consumer content may be posted to a World of
Warcraft's gaming site. Vivendi Games may be subject to lawsuits, governmental regulation or restrictions, and consumer backlash (including decreased sales and harmed
goodwill), as a result of consumers posting offensive content, any of which could harm Vivendi Games' operating results.

A substantial portion of World of Warcraft's subscribers pay their subscription fees using credit cards. Credit card fraud could have a negative impact
on Vivendi Games' business and operating results.

A substantial portion of the subscription revenue generated by World of Warcraft is paid by subscribers using
credit cards. At times, there may be attempts to use fraudulently obtained credit card numbers to pay for World of Warcraft upgrades or subscriptions.
Additionally, the credit card numbers of World of Warcraft's subscribers are maintained in a proprietary database that may be compromised internally or
externally by fraudulent maneuvers. As fraudulent schemes become more sophisticated, it may become
more difficult and more costly for Vivendi Games to detect credit card fraud and protect subscriber information. An increase in credit card fraud could have an adverse effect on Vivendi Games'
business and its operating results.

37

Risks Related to the Businesses of Activision and Vivendi Games

The future success of the Activision and Vivendi Games businesses depends on each company's ability to release popular products.

The life of any one console or handheld game product is relatively short and generally involves a relatively high level of sales during the first few months after
introduction followed by a rapid decline in sales. Because revenues associated with an initial product launch generally constitute a high percentage of the total revenues associated with the life of a
product, delays in product releases or disruptions following the commercial release of one or more new products could have a material adverse effect on the companies' operating results and cause such
operating results to be materially different from expectations. It is therefore important for each of Activision and Vivendi Games to be able to continue to develop many high quality new products that
are popularly received. Each company focuses its development and publishing activities principally on products that are, or have the potential to become, franchise brand properties. If the companies
are unable to do this, their respective business and financial results may be negatively affected.

The businesses of Activision and Vivendi Games are "hit" driven. If the companies do not deliver "hit" titles, or if consumers prefer competing
products, sales could suffer.

While many new products are regularly introduced, only a relatively small number of "hit" titles account for a significant portion of net revenue. Competitors may
develop titles that imitate or compete with either of Activision's or Vivendi Games' "hit" titles, and take sales away from them or reduce their ability to command premium prices for those titles. Hit
products published by the companies' competitors may take a larger share of consumer spending than anticipated, which could cause product sales to fall below expectations. If the companies'
competitors develop more successful products or offer competitive products at lower price, or if Activision or Vivendi Games does not
continue to develop consistently high-quality and well received products, revenues, margins, and profitability will decline.

If Activision or Vivendi Games is unable to maintain or acquire licenses to intellectual property, they may publish fewer "hit" titles and revenues may
decline.

Many of Activision's and Vivendi Games' products are based on intellectual property and other character or story rights acquired or licensed from third parties.
These license and distribution agreements are limited in scope and time, and Activision and Vivendi Games may not be able to renew key licenses when they expire or to include new products in existing
licenses. The loss of a significant number of intellectual property licenses or of either company's relationships with licensors, or the inability to obtain additional licenses of significant
commercial value could have a material adverse effect on the companies' ability to develop new products and therefore on each company's business and financial results. Additionally, the failure of
intellectual property acquired by either company to be popularly received could impact the market acceptance of those products in which the intellectual property is included. Such lack of market
acceptance could result in the write-off of the unrecovered portion of acquired intellectual property assets, which could cause material harm to the relevant company's business and
financial results. Furthermore, the competition for these licenses and distribution agreements is often intense. Competition for these licenses may also drive up the advances, guarantees, and
royalties that must be paid to the licensor, which could increase costs.

The interactive entertainment industry is highly competitive and competitors may succeed in narrowing the market share and reducing the sales of
Activision and Vivendi Games.

Activision and Vivendi Games compete with other publishers of PC and video game console interactive entertainment software and peripherals. The competitors vary
in size from small companies with limited resources to very large corporations with significantly greater financial, marketing, and

38

product
development resources than either company has. For example, integrated video game console hardware and software companies such as Sony, Nintendo, and Microsoft compete directly with the
companies in the development of software titles for their respective platforms. Certain of these competitors can spend more money and time on developing and testing products, undertake more extensive
marketing campaigns, adopt more aggressive pricing policies, pay higher fees to licensors for desirable motion picture, television, sports, music and character properties, and pay more to third-party
software developers than either Activision or Vivendi Games may be able to do.

Activision
and Vivendi Games also compete with other forms of entertainment and leisure activities. In particular, the overall growth in the use of the Internet and online services by
consumers may pose a competitive threat if customers and potential customers spend less of their available time using
interactive entertainment software and more using the Internet and online services. Future increased consumer acceptance and increases in the availability of online games or technological advances in
online game software or the Internet could result in a decline in platform-based software and negatively impact sales of each company's console and handheld products. Newer technological advances in
online game software may also render products such as Vivendi Games' World of Warcraft obsolete. Direct sales of software over the Internet by
competitors could materially adversely affect Activision's distribution business as well.

Competition
in the interactive entertainment industry is intense and Activision and Vivendi Games expect new competitors to continue to emerge.

The businesses of Activision and Vivendi Games are subject to risks and uncertainties of international trade.

Activision and Vivendi Games conduct business throughout the world, and each company derives a substantial amount of revenue from international trade,
particularly from Europe, Australia, and Asia. Activision's international revenues have accounted for 50%, 52% and 50% of Activision's consolidated net revenues in fiscal 2007, 2006 and 2005,
respectively. Similarly, Vivendi Games' international revenues have accounted for approximately 51%, 48% and 46%, of Vivendi Games' net revenue for the nine months ended September 30, 2007, and the
years ended December 31, 2006 and 2005, respectively. Each company expects that international revenues will continue to account for a significant portion of total revenues in the future.

Activision
and Vivendi Games are subject to risks inherent in foreign trade, including increased tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays, and
international political, regulatory and economic developments, all of which can have a significant impact on their respective operating results. A deterioration in relations between the U.S. and any
country in which Activision or Vivendi Games has significant operations or sales, including China, in particular, could result in the adoption or expansion of trade restrictions that harm Activision's
or Vivendi Games' business and operating results. The implementation of government regulations in a country that Activision or Vivendi Games has significant operations or sales could adversely impact
Activision's or Vivendi Games' business and operating results. For example, to operate in China, World of Warcraft must have a publishing number. A
decision by the Chinese government to revoke the number or decline to grant a number for future products would adversely impact Vivendi Games operating results. Additionally, in the past, legislation
has been implemented in China that has required modifications to the World of Warcraft software. The future implementation of similar laws may require
engineering modifications to either company's products that are not cost-effective, if even feasible at all or could degrade the customer experience to the point where customers ceased to purchase
such products.

If
government regulations or restrictions prevent Activision or Vivendi Games from repatriating internationally derived revenue into the U.S., or a country's tax structure makes
repatriation cost prohibitive, Activision or Vivendi Games may not transfer this revenue into the U.S., which could affect its ability to reinvest or utilize such amounts in its business.

39

Furthermore,
either company's international operations may be subject to changes in applicable local laws, regulatory requirements, tariffs and other barriers that may make it more
difficult, if not impossible, for such company to conduct business in foreign markets or may affect its operating margins.

In
addition, cultural differences may affect consumer preferences and limit the popularity of titles that are "hits" in the United States. If either company does not correctly assess
consumer preferences in the countries in our market, its sales and revenue may be lower than expected.

Fluctuations in foreign exchange rates may have a negative impact on the businesses of Activision or Vivendi Games.

Activision and Vivendi Games transact business in various foreign currencies and have significant international sales and expenses denominated in foreign
currencies, subjecting them to foreign currency risk. All of Vivendi Games' international sales are made in local currencies, which could fluctuate against the dollar. Vivendi Games has, in the past,
entered into various derivative financial instruments with Vivendi to manage and reduce the exposure to fluctuations in foreign currency exchange rates. All of these instruments are traded over the
counter by Vivendi with highly-rated counter-parties. All derivative financial instruments are only used for hedging purposes. Activision also has engaged in limited currency hedging activities. While
these hedging activities mitigate some foreign currency risk, each company's reported results of operations and financial condition would be adversely affected by unfavorable foreign currency
fluctuations. Additionally, there can be no assurance that Activision Blizzard will continue these programs, or that it will be successful in managing exposure to foreign currency risks. In the
future, currency exchange rates may have a negative or materially adverse impact on revenues from international sales and licensing and thus on each company's business and financial results.

Activision and Vivendi Games rely on independent third parties to develop some of their respective software products.

Activision and Vivendi Games rely on independent third-party software developers to develop some of their software products. Since they depend on these
developers, in the aggregate, the companies remain subject to the following risks:



continuing
strong demand for developers' resources, combined with the recognition they receive in connection with their work, may cause developers who worked for either of
Activision or Vivendi Games in the past either to work for a competitor in the future or to renegotiate agreements on terms less favorable for the companies;



limited
financial resources and business expertise and inability to retain skilled personnel may force developers out of business prior to completing products or require
Activision or Vivendi Games to fund additional costs; and



the
companies' competitors may acquire the businesses of key developers or sign them to exclusive development arrangements. In either case, the companies would not be able
to continue to engage such developers' services for their products, except for those that they are contractually obligated to complete.

Increased
competition for skilled third-party software developers also has compelled Activision and Vivendi Games to agree to make significant advance payments on royalties to game
developers. If the products subject to these arrangements do not generate sufficient revenues to recover these royalty advances, Activision or Vivendi Games, as applicable, would have to
write-off unrecovered portions of these payments, which could cause material harm to such company's business and financial results. Typically, Activision and Vivendi Games pay developers a
royalty based on a percentage of net revenues, less agreed upon deductions, but from time to time, the companies have agreed to pay

40

developers
fixed per unit product royalties after royalty advances are fully recouped. To the extent that sales prices of products on which the companies have agreed to pay a fixed per unit royalty
are marked down, profitability could be adversely affected.

The platform licensors of each of Activision and Vivendi Games set the royalty rates and other fees that must be paid to publish games for their
platforms, and therefore have significant influence on costs.

Activision and Vivendi Games pay a licensing fee to the hardware manufacturer for each copy of a product manufactured for that manufacturer's game platform. In
order to publish products for new hardware platforms, each company must take a license from the platform licensor which gives the platform licensor the opportunity to set the fee structure that must
be paid in order to publish games for that platform. Similarly, the platform licensors have retained the flexibility to change their fee structures for online gameplay and features for their consoles
and the manufacturing of products. The
control that platform licensors have over the fee structures for their platforms and online access makes it difficult for Activision and Vivendi Games to predict their respective costs and
profitability in the medium to long term. It is also possible that platform licensors will not renew existing licenses. Any increase in fee structures or nonrenewal of licenses would have a
significant negative impact on the companies' respective business models and profitability.

The businesses of Activision and Vivendi Games are highly dependent on the success, timely release and availability of new video game platforms, on the
continued availability of existing video game platforms, as well as each company's ability to develop commercially successful products for these platforms.

Activision
derives most of its revenue, and Vivendi Games, through its subsidiary Sierra, also derives a substantial amount of revenue, from the sale of products for play on video game
platforms manufactured by third parties, such as Sony's PlayStation 2, PlayStation 3 and PlayStation Portable, Microsoft's Xbox 360 and Nintendo's Wii and DS. The success of each company's
business is driven in large part by the availability of an adequate supply of these video game platforms, its ability to accurately predict which platforms will be successful in the marketplace, and
its ability to develop commercially successful products for these platforms. Activision and Vivendi Games must make product development decisions and commit significant resources well in advance of
the anticipated introduction of a new platform. A new platform for which Activision or Vivendi Games is developing products may be delayed, may not succeed or may have a shorter life cycle than
anticipated. Alternatively, a platform for which one or both of the companies have not devoted significant resources could be more successful than initially anticipated, causing such company to miss
out on a meaningful revenue opportunity. Additionally, the platforms for which either company is developing products are not released when anticipated, are not available in adequate quantities to meet
consumer demand, or do not attain wide market acceptance, the affected company's revenues may suffer, the affected company may be unable to fully recover its investments made in developing products,
and its financial performance may be harmed.

Transitions in console platforms could have a material impact on the market for interactive entertainment software.

In 2005, Microsoft released the Xbox and in 2006, Sony and Nintendo introduced their respective next-generation hardware platforms, the PlayStation 3
and Wii. When new console platforms are announced or introduced into the market, consumers typically reduce their purchases of game console entertainment software products for current console
platforms in anticipation of new platforms becoming available. During these periods, sales of game console entertainment software products may be expected to slow or even decline until new platforms
are introduced and achieve wide consumer acceptance. This decline may not be offset by increased sales of products for the new console platforms. As console hardware moves through its life cycle,
hardware manufacturers typically enact

41

price
reductions and decreasing prices may put downward pressure on software prices. During platform transitions, Activision and Vivendi Games may simultaneously incur costs both in continuing to
develop and market new titles for prior-generation video game platforms, which may not sell at premium prices, and also in developing products for next-generation platforms, which will not
generate immediate or near-term revenue. As a result, operating results during platform transitions may be more volatile and more difficult to predict than during other times, and such
volatility may cause greater fluctuations in Activision's stock price.

Activision and Vivendi Games must make significant expenditures to develop products for new platforms which may not be successful or released when
anticipated.

Each of Activision and Vivendi Games must make substantial product development and other investments in a particular platform well in advance of introduction of
the platform and may be required to realign its product portfolio and development efforts in response to market changes. Furthermore, development costs for new console platforms are greater than such
costs for current console platforms. If increased costs are not offset by higher revenues and other cost efficiencies, operating results will suffer and the affected company's financial position will
be harmed. If the platforms for which Activision or Vivendi Games develop new software products or modify existing products are not released on a timely basis or do not attain significant market
penetration, or development of products is cancelled in response to market changes, the affected company may not be able to recover its development costs, which could be significant, and its business
and financial results could be significantly harmed.

In
addition, Activision and Vivendi Games seek to release many of their products in conjunction with specific events, such as the release of a related movie. If either company misses
these key selling periods due to product delays or delayed introduction of a new platform for which it has developed products, such company's sales may suffer disproportionately.

If the average price of prior-generation titles continues to decline or if Activision or Vivendi Games is unable to sustain launch pricing on
next-generation titles, the affected company's operating results will suffer.

Both Activision and Vivendi Games have experienced a decrease in the average price of titles for prior-generation platforms. As the interactive entertainment
industry transitions to next-generation video game platforms, the companies expect there to be fewer prior-generation titles able to command premium prices, and that even these titles will
be subject to price reductions at an earlier point in their sales cycle than has been seen in prior years. The companies expect the average price of prior-generation titles to continue to decline,
which may have a negative effect on each company's margins and operating results.

Next-generation
titles for the Xbox 360, Sony's PlayStation 3 and the Nintendo Wii have been offered at premium retail prices since the launch of such consoles.
Activision and Vivendi Games expect to continue to price next-generation titles at a premium level, but if they are unable to sustain launch pricing on these next-generation
titles they may experience a negative effect on their respective margins and operating results.

Platform licensors are chief competitors of both Activision and Vivendi Games and frequently control the manufacturing of and have broad approval rights
over each company's console and handheld video game products.

Generally, when Activision or Vivendi Games develops interactive entertainment software products for hardware platforms offered by Sony, Nintendo, or Microsoft,
the products are manufactured exclusively by that hardware manufacturer or their approved replicator.

42

The
agreements with these manufacturers include certain provisions, such as approval rights over all software products and related hardware peripherals and promotional materials and the
ability to change the fee they charge for the manufacturing of products, which allow them substantial influence over the cost and the release schedule of such interactive entertainment software
products. In addition, since each of the manufacturers is also a publisher of games for its own hardware platforms and manufactures products for all of its other licensees, a manufacturer may give
priority to its own products or those of competitors in the event of insufficient manufacturing capacity. Accordingly, Sony, Nintendo, or Microsoft could cause unanticipated delays in the release of
products as well as increases
to projected development, manufacturing, marketing, or distribution costs, which could materially harm the business and financial results of one or both of the companies.

In
addition, platform licensors control each company's ability to provide online game capabilities for console platform products and in large part establish the financial terms on which
these services are offered to consumers. Currently, Microsoft provides online capabilities for the Xbox 360 and Sony provides online capabilities for PlayStation 2 and
PlayStation 3 products. In each case, compatibility code and/or the consent of the licensor are required for both companies to include online capabilities in its console products. As these
capabilities become more significant, the failure or refusal of licensors to approve either company's products may harm the business and financial results of the affected company.

Activision and Vivendi Games may face difficulty obtaining access to retail shelf space necessary to market and sell their products effectively.

Retailers typically have a limited amount of shelf space and promotional resources, and there is intense competition among consumer interactive entertainment
software products for high quality retail shelf space and promotional support from retailers. To the extent that the number of products and platforms increases, competition for shelf space may
intensify and may require the companies to increase their respective marketing expenditures. Retailers with limited shelf space typically devote the most and highest quality shelf space to those
products expected to be best sellers. Neither Activision nor Vivendi Games can be certain that its new products will consistently achieve such "best seller" status. Due to increased competition for
limited shelf space, retailers and distributors are in an increasingly better position to negotiate favorable terms of sale, including price discounts, price protection, marketing and display fees,
and product return policies. Activision's and Vivendi Games' products constitute a relatively small percentage of any retailer's sales volume. Neither Activision nor Vivendi Games can be certain that
retailers will continue to purchase their respective products or to provide those products with adequate levels of shelf space and promotional support on acceptable terms. A prolonged failure in this
regard may significantly harm one or both of the companies' business and financial results.

Activision's and Vivendi Games' products may be subject to legal claims.

In prior fiscal years, at least two lawsuits have been filed against numerous video game companies, including against Activision, by the families of victims who
were shot and killed by teenage gunmen in attacks perpetrated at schools. These lawsuits alleged that the video game companies manufactured and/or supplied these teenagers with violent video games,
teaching them how to use a gun and causing them to act out in a violent manner. These lawsuits have been dismissed. Similar additional lawsuits may be filed in the future. Although, with respect to
the prior lawsuits against Activision, its general liability insurance carrier agreed to defend such suits, it is uncertain whether either company's insurance carrier would do so in the future, or if
such insurance carriers would cover all or any amounts which Activision or Vivendi Games might be liable for if such future lawsuits are not decided in such company's favor. If such future lawsuits
are filed and ultimately decided against either company and the relevant insurance carrier does not cover the amounts for which such company may be liable for, it could have a material adverse effect
on such company's business and financial results. Payment

43

of
significant claims by insurance carriers may make such insurance coverage materially more expensive or unavailable in the future, thereby exposing one or both of the companies to additional risk.

If the products of Activision or Vivendi Games contain defects, their business could be harmed significantly.

Software products and peripherals as complex as the ones published by each of Activision and Vivendi Games may contain undetected errors when first introduced or
when new versions are released. Despite extensive testing prior to release, neither company can be certain that errors will not be found in new products or releases after shipment that could result in
loss of or delay in market acceptance. This loss or delay could significantly harm the relevant company's business, financial results, and reputation.

Activision and Vivendi Games may permit their respective customers to return products and to receive pricing concessions which could reduce net revenues
and results of operations.

Activision and Vivendi Games are exposed to the risk of product returns and price protection with respect to their distributors and retailers. Return policies
allow distributors and retailers to return defective, shelf-worn, and damaged products in accordance with terms granted. Price protection, when granted and applicable, allows customers a
credit against amounts owed with respect to merchandise unsold by them. Activision and Vivendi Games may permit product returns from, or grant price protection to, customers under certain conditions.
These conditions include compliance with applicable payment terms, delivery of weekly inventory and sell-through reports, and
consistent participation in the launches of premium title releases. The companies may also consider other factors, including the facilitation of slow-moving inventory and other market
factors. When each company offers price protection, it is offered with respect to a particular product to all retail customers; however, only those customers who meet the conditions detailed above can
avail themselves of such price protection. Activision also offers a 90-day limited warranty to its end users that its products will be free from manufacturing defects. Although each
company maintains a reserve for returns and price protection, and although they may place limits on product returns and price protection, the companies could be forced to accept substantial product
returns and provide substantial price protection to maintain their respective relationships with retailers and their access to distribution channels. Product returns and price protection that exceed
reserves could significantly harm the relevant company's business and financial results.

The businesses of Activision and Vivendi Games may be burdened with payment defaults and uncollectible accounts if either company's distributors or
retailers cannot honor their existing credit arrangements.

Distributors and retailers in the interactive entertainment software industry have from time to time experienced significant fluctuations in their businesses and
a number of them have failed. The insolvency or business failure of any significant retailer or distributor could materially harm the business and financial results. Activision and Vivendi Games
typically make sales to most retailers and some distributors on unsecured credit, with terms that vary depending upon the customer's credit history, solvency, credit limits, and sales history, as well
as whether sufficient credit insurance can be obtained. Although, as in the case with most customers, Activision and Vivendi Games have insolvency risk insurance to protect against a customers'
bankruptcy, insolvency, or liquidation, this insurance contains significant deductibles and co-payment obligations, and does not cover all instances of non-payment. In
addition, although Activision and Vivendi Games maintain a reserve for uncollectible receivables, the reserve may not be sufficient in every circumstance. As a result, a payment default by a
significant customer could significantly harm the relevant company's business and financial results.

44

The businesses of Activision and Vivendi Games are subject to risks generally associated with the entertainment industry, any of which could
significantly harm each company's operating results.

The businesses of Activision and Vivendi Games are subject to risks that are generally associated with the entertainment industry, including the popularity, price
and timing of games and the platforms on which they are played; economic conditions that adversely affect discretionary consumer spending; changes in consumer demographics; the availability and
popularity of other forms of entertainment; and critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be
predicted. Many of these risks are beyond the control of Activision and Vivendi Games. These risks could negatively impact each company's business and financial results.

Activision and Vivendi Games are exposed to seasonality in the sale of their products.

The interactive entertainment software industry is highly seasonal, with the highest levels of consumer demand occurring during the calendar year end holiday
buying season. As a result, net revenues, gross profits, and operating income have historically been highest during the second half of the calendar year. Receivables and credit risk are likewise
higher during the second half of the calendar year as customers stock up on the companies' products for the holiday season. Additionally, in a platform transition period, sales of game console
software products can be significantly affected by the timeliness of introduction of game console platforms by the manufacturers of those platforms, such as Sony, Nintendo, and Microsoft. The timing
of hardware platform introduction is also often tied to holidays and is not within either company's control. If a hardware platform is released unexpectedly close to the holidays, this would result in
a shortened holiday buying season and could negatively impact the sales of each company's products. Further, delays in development, licensor approvals, or manufacturing can also affect the timing of
the release of products, causing the companies to miss key selling periods such as the calendar year end holiday buying season.

Activision and Vivendi Games may not be able to adequately adjust their respective cost structures in a timely fashion in response to a sudden decrease
in demand.

A significant portion of each company's selling and general and administrative expense is comprised of personnel and facilities. In the event of a significant
decline in revenues, Activision and Vivendi Games may not be able to exit facilities, reduce personnel, or make other changes to their respective cost structures without disruption to operations or
without significant termination and exit costs. Management may not be able to implement such actions in a timely manner, if at all, to offset an immediate shortfall in revenues and profit.

If Activision and Vivendi Games do not continue to attract and retain key personnel, they will be unable to effectively conduct their respective
businesses.

The success of each of Activision and Vivendi Games depends to a significant extent on each company's ability to identify, hire, and retain skilled personnel. The
software industry is characterized by a high level of employee mobility and aggressive recruiting among competitors for personnel with technical, marketing, sales, product development, and management
skills. One or both of the companies may have difficulties in attracting and retaining skilled personnel or may incur significant costs in order to do so. If Activision or Vivendi Games is unable to
attract additional qualified
employees or retain the services of key personnel, its business and financial results could be negatively impacted.

45

The products of Activision and Vivendi Games are subject to the threat of piracy and unauthorized copying, and inadequate intellectual property laws and
other protections could prevent the companies from enforcing or defending their respective proprietary technologies.

Each of Activision and Vivendi Games regard its software as proprietary and relies on a combination of copyright, patent, trademark and trade secret laws,
employee and third-party nondisclosure agreements, and other methods to protect its proprietary rights. Activision and Vivendi Games own or license various copyrights, patents, and trademarks. Each
company is aware that some unauthorized copying occurs, and if a significantly greater amount of unauthorized copying of its software products were to occur, it could cause material harm to such
company's business and financial results.

Policing
unauthorized use of the companies' products is difficult, and software piracy is a persistent problem, especially in certain countries. Further, the laws of some countries where
Activision's and Vivendi Games' products are or may be distributed either do not protect their products and intellectual property rights to the same extent as the laws of the United States, or are
poorly enforced. Legal protection of each company's rights may be ineffective in such countries. In addition, though each company takes steps to make the unauthorized copying and distribution of its
products more difficult, neither company's efforts may be successful in controlling the piracy of its products. Organized pirate operations have been expanding globally. In addition, the proliferation
of technology designed to circumvent the protection measures used in the companies' products, the availability of broadband access to the Internet, the ability to download pirated copies of games from
various Internet sites and peer-to-peer networks, and the widespread proliferation of Internet cafes using pirated copies of each company's products, all have contributed to an
expansion in piracy. This could have a negative effect on each company's respective growth and profitability in the future.

Moreover,
as the companies leverage their software products using emerging technologies such as the Internet and online services, the ability to protect intellectual property rights and
to avoid infringing intellectual property rights of others may diminish. Neither Activision nor Vivendi Games can be certain that existing intellectual property laws will provide adequate protection
for its products in connection with these emerging technologies.

Data breaches involving the source code for Activision's and Vivendi Games' products or customer or employee data stored by the companies could
adversely affect their respective reputations and revenues.

Activision and Vivendi Games store the source code for their interactive entertainment software products as it is created on multiple electronic devices. In
addition, the companies store customer account information for, and other confidential information related to, employees. A breach of the systems on which such source code, account information and
other sensitive data is stored could lead to piracy of the companies' software or fraudulent activity and claims and lawsuits in connection with data security breaches. A data intrusion into
Blizzard's World of Warcraft servers could also disrupt the operation of World of Warcraft. If
Activision or Vivendi Games is subject to data security breaches, it may have a loss in sales or be forced to pay damages or other amounts, which could materially and adversely affect profitability.
In addition, any damage to its reputation resulting from a data breach could have a material adverse impact on revenues and future growth prospects, or increase costs by leading to additional security
measures being required.

Activision and Vivendi Games may be subject to intellectual property claims.

As the number of interactive entertainment software products increases and the features and content of these products continue to overlap, software developers
increasingly may become subject to infringement claims. Many of the companies' products are highly realistic and feature materials that are based on real world examples, which may be the subject of
intellectual property infringement claims of others. In addition, the companies' products often utilize complex, cutting edge technology that may

46

become
subject to emerging intellectual property rights of others. Although both Activision and Vivendi Games believe that it makes reasonable efforts to ensure that its products do not violate the
intellectual property rights of others, it is possible that third parties still may claim infringement. From time to time, each company receives communications from third parties regarding such
claims. Existing or future infringement claims against Activision and Vivendi Games, whether valid or not, may be time consuming and expensive to defend.

Intellectual
property litigation or claims could force the companies to do one or more of the following:



cease
selling, incorporating, or using products or services that incorporate the challenged intellectual property;



obtain
a license from the holder of the infringed intellectual property, which if available at all, may not be available on commercially favorable terms; or



redesign
the affected interactive entertainment software products or hardware peripherals, which could result in additional costs, delay introduction and possibly reduce
commercial appeal of the affected products.

Any
of these actions may cause material harm to the relevant company's respective business and financial results.

Each of Activision's and Vivendi Games' products are subject to ratings by the Entertainment Software Rating Board and similar agencies. Failure to
obtain target ratings could negatively impact sales.

The Entertainment Software Rating Board, or ESRB, requires game publishers to provide consumers with ratings information, including information relating to
violence, nudity, or sexual content contained in software titles, and imposes significant penalties for noncompliance. Certain countries have also established similar rating systems as prerequisites
for product sales in those countries. In some instances, a company may be required to modify its products to comply with the requirements of the rating systems, which could delay or disrupt the
release of any given product, or may prevent their sale altogether in certain territories. The relevant ratings include "Everyone" (age 6 and older), "Everyone 10+" (age 10 and older), "Teen" (age 13
and over), or "Mature" (age 17 and over). Certain of Activision's and Vivendi Games' titles have received a "Mature" rating. None of either company's titles has received the "Adults Only" rating (18
and over). Activision and Vivendi Games believe that they comply with rating systems and properly display the ratings and content descriptions received for their respective titles. If either company
is unable to obtain the targeted ratings for its products as a result of changes in the ESRB's ratings standards or for other reasons, including the adoption of legislation in this area, the relevant
company's business and prospects could be negatively affected.

The business, products, and distribution of Activision and Vivendi Games are subject to increasing regulation of content in key territories. If each
company does not successfully respond to these regulations, its business may suffer.

Legislation is continually being introduced that may affect both the content and the distribution of products. For example, privacy laws in the United States and
Europe impose various restrictions on the collection and storage of personal information. Those rules vary by territory although the Internet recognizes no geographical boundaries. In addition, many
foreign countries have laws that permit governmental entities to censor the content and/or advertising of interactive entertainment software. Other countries, such as Germany, prohibit certain types
of content.

In
the United States, numerous laws have been introduced at the federal and state level which attempt to restrict the content of games or the distribution of such products. For example,
recent legislation has been adopted in several states, and proposed at the federal level, that prohibits the sale

47

of
certain games (e.g., violent games or those with "M (Mature)" or "AO (Adults Only)" ratings) to minors. In addition, a number of state
legislative bodies in states such as Illinois, California, Michigan, and Washington have introduced various forms of legislation designed to regulate and control sales of video games deemed
inappropriate for sales to minors. New and recent incidents linking video games and violence may lead to increased pressure for legislative activity. To date, all the courts have ruled on such
legislation in a manner favorable to the interactive entertainment software industry. But in the event such legislation is adopted and enforced, sales may be harmed because the products each company
is able to offer to its customers and the size of the potential market for its products may be limited. Activision and Vivendi Games may also be required to modify certain products or alter marketing
strategies to comply with new and possibly inconsistent regulations, which could be costly or delay the release of its products.

If one or more of Activision's or Vivendi Games' titles were found to contain objectionable undisclosed, pertinent content, the relevant company's
business could suffer.

Throughout the history of this industry, many video games have been designed to include certain hidden content and gameplay features that are accessible through
the use of in-game cheat codes or other technological means that are intended to enhance the gameplay experience. However, in some cases, undisclosed, pertinent content or features have
been found in other publishers' interactive entertainment software products. In a few cases, the ESRB has reacted to discoveries of undisclosed, pertinent content and features by changing the rating
that was originally assigned to the product, requiring the publisher to change the game and/or game packaging and/or fining the publisher. Retailers have on occasion reacted to the discovery of such
undisclosed content by removing these games from their shelves, refusing to sell them, and demanding that their publishers accept them as product returns. Likewise, interactive entertainment software
consumers have reacted to the revelation of undisclosed content by refusing to purchase such games, demanding refunds for games they have already purchased, refraining from buying other games
published by the company whose game contained the objectionable material, and, in at least one occasion, filing a lawsuit against the publisher of the product containing such content.

Activision
and Vivendi Games have implemented preventative measures designed to reduce the possibility of objectionable undisclosed, pertinent content from appearing in the video games
they publish. Nonetheless, these preventative measures are subject to human error, circumvention, overriding, and reasonable resource constraints. If a video game either company published were found
to contain undisclosed, pertinent content, the ESRB could demand that the game be recalled and its packaging changed to reflect a revised rating, retailers could refuse to sell it and demand the
acceptance of returns of any unsold copies or returns from customers, and/or consumers could refuse to buy it, demand refunds or file lawsuits. This could have a material negative impact on operating
results and financial condition. In addition, a company's reputation could be harmed, which could impact sales of its other video games. If any of these consequences were to occur, the business and
financial performance could be significantly harmed.

Other Risks Related to Business and Operations Following the Transaction

Historically, Activision's stock price has been highly volatile.

The trading price of Activision's common stock has been and could continue to be subject to wide fluctuations in response to many factors, including:



quarter
to quarter variations in results of operations;



the
announcements of new products;



competitors'
announcements of new products;

48



product
development or release schedule;



general
conditions in the computer, software, entertainment, media or electronics industries, and in the economy;



timing
of the introduction of new platforms and delays in the actual release of new platforms;

changes
in earnings estimates or buy/sell recommendations by analysts;



sales
or acquisitions of common stock by Activision Blizzard's directors, executive management, or Vivendi and its affiliates; and



investor
perceptions and expectations regarding products, plans and strategic position, and those of the company's competitors and customers.

In
addition, the public stock markets experience extreme price and trading volume volatility, particularly in high technology sectors of the market. This volatility has significantly
affected the market prices of securities of many technology companies for reasons often unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely
affect the market price of Activision Blizzard common stock after completion of the transaction.

The requirements of integrating and maintaining internal controls at the combined company may strain Activision Blizzard's resources and divert
management's attention, and if we fail to establish and maintain proper internal controls, the combined company's ability to produce accurate financial statements or comply with applicable regulations
could be impaired.

As
a result of the transaction, Vivendi Games, which is a privately-held company, will become a wholly-owned subsidiary of Activision Blizzard and thus will become subject to the
reporting requirements of the Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and the rules and regulations of the NASD. The requirements of these rules and
regulations will increase Activision Blizzard's legal, accounting and financial compliance costs, will make some activities more difficult, time-consuming and costly and may also place
undue strain on the combined company's personnel, systems and resources.

The
Sarbanes-Oxley Act requires, among other things, that a company maintain effective disclosure controls and procedures and internal control over financial reporting. In order to
maintain the effectiveness of Activision Blizzard's disclosure controls and procedures and internal control over financial reporting during the integration process following the transaction,
Activision Blizzard will need to expend significant resources and provide significant management oversight. The combined company has a substantial effort ahead of it to implement appropriate
processes, implement and document a comprehensive and uniform system of internal control over relevant processes of the combined company, assess their design, remediate any deficiencies identified and
test their operation. As a result, management's attention may be diverted from other business concerns, which could harm the combined company's business, operating results and financial condition.
These efforts will also involve substantial accounting-related costs. In addition, if the combined company is unable to continue to meet these requirements, it may not be able to remain listed on
NASDAQ.

Implementing
any appropriate changes to internal controls or integrating existing procedures may require specific compliance training of its officers and employees, entail substantial
costs in order to modify its existing accounting systems, and take a significant period of time to complete. These actions may not, however, be effective in establishing the adequacy of its internal
controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely

49

basis,
could increase Activision Blizzard's operating costs and could materially impair its ability to operate the business. In the event that the combined company is not able to demonstrate
compliance with Section 404 of the Sarbanes-Oxley Act in a timely manner, that its internal controls are perceived as inadequate or that it is unable to produce timely or accurate financial
statements, investors may lose confidence in Activision Blizzard's operating results and its stock price could decline.

Activision Blizzard will be subject to income taxes in the United States and in various foreign jurisdictions. Significant judgment is required in determining
worldwide provision for income taxes and, in the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. Activision is, and the
combined company will be, required to estimate future taxes. Although Activision currently believes its tax estimates are reasonable, the estimate
process is inherently uncertain, and such estimates are not binding on tax authorities. The effective tax rate could be adversely affected by changes in the business, including the mix of earnings in
countries with differing statutory tax rates, changes in tax elections, changes in applicable tax laws as well as other factors. Further, tax determinations are regularly subject to audit by tax
authorities and developments in those audits could adversely affect the relevant income tax provision. Should the ultimate tax liability exceed estimates, the combined company's income tax provision
and net income could be materially affected.

Activision
is, and Activision Blizzard will be, also required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property, and goods and services
taxes, in both the United States and various foreign jurisdictions. Tax authorities regularly examine these non-income taxes. There can be no assurance that the outcomes from these
examinations, changes in the business or changes in applicable tax rules will not have an adverse effect on operating results and financial condition.

50

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This proxy statement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to: (a) projections of revenues, expenses, income or loss, earnings or loss per share, cash flow projections or other financial items; (b) statements of our
plans and objectives, including those relating to product releases; (c) statements of future economic performance; and (d) statements of assumptions underlying such statements. We
generally use words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "intend," "may," "outlook," "plan," "positioned," "potential," "project," "remain,"
"scheduled," "set to," "subject to," "to be," "upcoming," "will" and other similar expressions to help identify forward-looking statements. These forward-looking statements are subject to business and
economic risk, reflect management's current expectations, estimates and projections about our business, and are inherently uncertain and difficult to predict. Our actual results could differ
materially.

Factors
that could cause actual future results to differ materially from those expressed in the forward-looking statements set forth in this proxy statement include, but are not limited
to, the timing and successful completion of the transaction (including the timing and receipt of stockholder and regulatory approvals and the satisfaction of other closing conditions), Activision
Blizzard's success in executing planned strategies and achieving assumed synergies and cost savings, sales of each company's titles, shifts in consumer spending trends, the seasonal and cyclical
nature of the interactive game market, the ability of Activision Blizzard to predict consumer preferences among competing hardware platforms (including next-generation hardware), declines
in software pricing, product returns and price protection, product delays, retail acceptance of Activision Blizzard's products, adoption rate and availability of new hardware and related software,
industry competition, rapid changes in technology and industry standards, protection of proprietary rights, maintenance of relationships with key personnel, customers, vendors and third-party
developers, international economic and political conditions, integration of recent acquisitions and identification of suitable future acquisition opportunities, and foreign exchange rate changes.

The
forward-looking statements contained herein speak only as of the date on which they were made, and we disclaim any obligation to update any forward-looking statements to reflect
events or circumstances after the date of this proxy statement. For further details and a discussion of these and other risks and uncertainties, see the section of this proxy statement entitled "Risk
Factors."

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THE SPECIAL MEETING

Date, Time and Place

The special meeting of Activision stockholders will be held
on ,
, 2008
at , local time,
at . We are
delivering these proxy materials to you in connection with the solicitation of proxies by our board of directors for use at the special meeting and any adjournment or postponement thereof.

Purpose of the Special Meeting

At the special meeting, you will be asked to consider and vote on:

Proposal No. 1:

To approve the issuance of an aggregate of approximately 358.2 million new shares of Activision common stock, in connection with (a) the merger of a wholly-owned subsidiary of Activision with and into Vivendi
Games, and (b) the purchase of shares of Activision common stock by Vivendi;

Proposal No. 2:

To approve the amendment and restatement of Activision's certificate of incorporation, including, without limitation, the approval of the following subproposals:



2Aa proposal to change the combined company's name from "Activision, Inc." to "Activision Blizzard, Inc.";



2Ba proposal to increase the number of authorized shares of capital stock from four hundred fifty-five million (455,000,000) to one billion two hundred five million (1,205,000,000);



2Ca proposal to eliminate the Series A Junior Preferred Stock;



2Da proposal to include certain quorum requirements for committees of the board of directors under certain circumstances;



2Ea proposal to require supermajority stockholder approval to amend certain sections of the certificate of incorporation;



2Fa proposal to limit the power of the board of directors to amend certain provisions of the bylaws without stockholder approval;



2Ga proposal to grant the directors designated by Vivendi certain voting powers when other Vivendi designees are not present at board or committee meetings;



2Ha proposal to include limitations on certain business activities in which Vivendi may, directly or indirectly, engage or participate;

2Ja proposal to require Vivendi or Activision Blizzard to purchase all of the combined company's issued and outstanding shares of common stock if and when Vivendi becomes the record owner of more than 90% of the issued and outstanding shares of
common stock;

2La proposal to cause the combined company to be governed by Section 203 of the DGCL, a statute which restricts business combinations between corporations and their significant stockholders.

52

Proposal No. 3:

To approve the amendment of Section 7.4(a) of Activision's bylaws to restrict the amendment of additional sections of the bylaws without stockholder approval, as described in more detail in this proxy statement; and

Proposal No. 4:

To approve any motion to adjourn or postpone the special meeting to a later date or dates, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposals set forth
above.

You
may also be asked to act on other business, if any, that may properly come before the special meeting (or any adjournment or postponement thereof). We currently do not anticipate
that any other business will be presented at the special meeting

Approval of Proposal No. 1the share issuance proposal, Proposal No. 2the charter amendment proposal (including each of the
related subproposals under Proposal No. 2) and Proposal No. 3the bylaw amendment proposal, is required for the completion of the transaction. Accordingly, if you wish to
approve the transaction, you must vote "FOR" each of Proposals Nos. 1, 2 (including the related subproposals under Proposal No. 2) and 3.

Proposal
No. 4the adjournment proposal is not required to complete the transaction. If the transaction is not completed, the amendment and restatement of our
certificate of incorporation specified in Proposal No. 2 (including all related subproposals except for the subproposal related to the increase in the number of authorized shares of capital
stock), and the amendment of Section 7.4(a) of our bylaws specified in Proposal No. 3, will be abandoned and will not become effective.

Record Date; Stock Entitled to Vote

You are entitled to receive notice of, and vote at, the Activision special meeting (and any adjournment or postponement thereof) only if you were a stockholder of
Activision at the close of business on , 2008, the record date for the special meeting.

At
the close of business on the record date,
shares of Activision common stock
were outstanding and entitled to vote. Each share of Activision common stock outstanding on
the record date will be entitled to one (1) vote on each matter presented for action at the special meeting. No other shares of Activision capital stock are entitled to notice of and to vote at
the special meeting.

Attending the Meeting

Subject to space availability, all stockholders as of the record date, or their duly appointed proxies, may attend the meeting. Since seating is limited,
admission to the meeting will be on a first-come, first-served basis. Registration and seating will begin
at , local time.

If
you are an Activision stockholder of record, an admission ticket is enclosed with your proxy card. If you wish to attend the special meeting, please vote your proxy but keep the
admission ticket and bring it with you to the special meeting.

If
your shares are held in "street name" by a bank, broker or other nominee record holder, and you wish to attend the special meeting, you need to bring a copy of a bank or brokerage
statement to the special meeting reflecting your stock ownership as of the record date.

Voting Procedures

Submitting Proxies or Voting Instructions

Whether you hold shares of Activision common stock directly as a stockholder of record or in "street name," you may direct the voting of those shares without
attending the special meeting. You

53

may
vote Activision shares directly by granting proxies or, for shares held in "street name," by submitting voting instructions to your bank, broker or other nominee record holder.

If you hold your shares directly as an Activision stockholder of record, you may submit a proxy by voting in person at the special meeting
or by using one of the following methods:



Telephone Voting, by calling the telephone number shown on your proxy card and following the instructions on your proxy card;



Internet Voting, by going to the web address https://www.continentalstock.com and following the instructions on your proxy
card; or



Mail, by completing, dating, signing and returning your proxy card in the enclosed return envelope; the envelope requires no
additional postage if mailed in the United States.

To
ensure that your proxy is voted, a telephonic or Internet vote must be received by 7:00 p.m. Eastern time the day prior to the special meeting; a vote on a physical proxy card
must be received prior to the closing of the polls at the special meeting.

By
casting your vote in any of the three ways listed above, you are authorizing the individuals listed on the proxy to vote your shares in accordance with your instructions.

If
you are an Activision stockholder of record you may also vote in person at the special meeting by submitting your proxy card or by filling out a ballot at the special meeting.

If your Activision shares are held in "street name" by a bank, broker or other nominee record holder, you must follow the voting
instructions on the form you receive from that institution. Although most banks and brokers now offer telephone and Internet voting, availability and specific procedures will depend on their voting
arrangements. If your shares are held in "street name" by a bank, broker or other nominee record holder and you wish to vote in person at the special meeting, you must request a legal proxy from your
bank, broker or other nominee record holder and present that proxy and proof of identification at the special meeting.

Revoking Proxies or Voting Instructions

If you hold your shares directly as an Activision stockholder of record, you may revoke your proxy at any time before it is exercised at the Activision special
meeting by:



delivering
a written notice of revocation, dated later than the proxy, to Activision's Corporate Secretary;

submitting
a new proxy by telephone or via the Internet (your latest telephone or Internet voting instructions will be followed), before 7:00 p.m. Eastern time on
, 2008; or



attending
the Activision special meeting and voting in person. However, your attendance at the special meeting in and of itself will not cause your previously granted
proxies to be revoked. In order to revoke any prior proxies, you must hand deliver a written revocation notice, or a later dated proxy, to Activision's Corporate Secretary at the special meeting
before a vote is taken at the special meeting.

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Any
written notice of revocation or later dated proxy should be delivered to:

If
your shares are held in "street name," and you have instructed a bank, broker or other nominee record holder to vote your shares, you must follow the instructions you receive from
your bank, broker or other nominee record holder in order to change or revoke your vote. You may also change your vote by attending the special meeting and voting in person provided that you have
obtained a signed proxy from the record holder (i.e., your bank, broker or other nominee record holder) giving you the right to vote those shares.

Proxies; Counting Your Vote

If you provide specific voting instructions, your shares will be voted at the special meeting in accordance with your instructions. If you hold your shares
directly as an Activision stockholder of record and sign and return a proxy card or submit a proxy by telephone or via the Internet without giving specific voting instructions, your shares will be
voted as follows:



"FOR" approval of Proposal No. 1the share issuance proposal;



"FOR" approval of Proposal No. 2the charter amendment proposal;



"FOR" approval of Proposal No. 3the bylaw amendment proposal; and



"FOR" approval of Proposal No. 4the adjournment proposal.

Quorum

The presence of the holders of a majority of all of the shares of capital stock of Activision entitled to vote at the special meeting is necessary to establish a
quorum at the special meeting. Stockholders are counted as present at the special meeting if they are present in person or are represented by proxy. Shares of Activision common stock subject to
abstentions as well as broker non-votes will be treated as present at the special meeting and will therefore be counted toward establishing the presence of a quorum.

Votes Required

Vote Required to Approve Proposal No. 1The Share Issuance Proposal

The affirmative vote of the holders of a majority of the votes cast affirmatively or negatively is required to approve Proposal No. 1the share
issuance proposal. The approval of Proposal No. 1 is a condition to the completion of the transaction; thus, a vote against this proposal effectively will be a vote
against the transaction.

The affirmative vote of the holders of a majority of the outstanding shares of Activision common stock entitled to vote is required to approve Proposal
No. 2the charter amendment proposal. The approval of Proposal No. 2 is a condition to the completion of the transaction; thus, a vote against this
proposal (or any of the related subproposals) effectively will be a vote against the transaction.

55

Vote Required to Approve Proposal No. 3The Bylaw Amendment Proposal

The affirmative vote of the holders of at least a majority of the outstanding shares of Activision common stock entitled to vote is required to approve Proposal
No. 3the bylaw amendment proposal. The approval of Proposal No. 3 is a condition to the completion of the transaction; thus, a vote against this
proposal effectively will be a vote against the transaction.

Vote Required to Approve Proposal No. 4The Adjournment Proposal

The affirmative vote of the holders of a majority of the votes cast affirmatively or negatively is required to approve Proposal No. 4the
adjournment proposal.

Abstentions and Broker Non-Votes

Proposals Nos. 1 and 4. The vote required to approve the share issuance proposal and the adjournment proposal is based
upon the number of shares actually voted (rather than upon a percentage of the shares of Activision common stock outstanding as of the record date). Therefore, your failure to vote any of your shares
of Activision common stock on Proposals Nos. 1 and 4 will have no effect on the outcome of the vote for these proposals. Similarly, abstentions and broker non-votes will not affect
the outcome of the vote on these proposals, because they will be counted in determining the presence of a quorum but they will not be considered to be voted for purposes of Proposals Nos. 1 and
4.

Proposals Nos. 2 (including all related subproposals) and 3. The vote required to approve the charter amendment
proposal (including each of the related subproposals), and the bylaw amendment proposal is based upon a percentage of the shares of Activision common stock outstanding as of the record date (rather
than upon the number of shares actually voted). Therefore, your failure to vote any of your shares of Activision common stock on Proposals Nos. 2 (including related subproposals) or 3 will have
the same effect as a vote against these proposals. Similarly, abstentions will have the same effect as a vote against Proposals Nos. 2
(including related subproposals) and 3. If you fail to instruct your bank, broker or other nominee record holder on how
to vote any of your shares of Activision common stock with respect to Proposals Nos. 2 (including related subproposals) and 3, the resulting broker non-vote will also be counted as
a vote against these proposals.

Adjournments

If a quorum is not present at the special meeting, the special meeting may be adjourned until a quorum is present or represented. In addition, the officer
presiding at the special meeting may propose one or more adjournments of the special meeting to permit further solicitation of proxies in favor of Proposals Nos. 1, 2 (including all related
subproposals) and 3. Any such adjournment will require the
affirmative vote of the holders of a majority of the votes cast affirmatively or negatively at the special meeting and may be for up to thirty (30) days without further notice (unless a new
record date is fixed for the adjourned special meeting), other than by an announcement made at the special meeting.

Voting by Activision Directors and Executive Officers

On the record date for the Activision special meeting, directors and executive officers of Activision and their affiliates owned and were entitled to vote
shares of Activision common stock,
or approximately % of the total voting power of the shares of Activision common stock outstanding on that date.

56

Solicitation of Proxies; Payment of Solicitation Expenses

The solicitation of proxies from Activision stockholders is being made on behalf of the Activision board of directors. Activision will bear all costs and expenses
associated with printing and mailing this proxy statement as well as all fees paid to the SEC. Activision will also pay the costs of soliciting and obtaining proxies from Activision stockholders,
including the cost of reimbursing brokers, banks and other financial institutions for forwarding proxy materials to their customers. In addition to the mailing of these proxy materials, proxies may be
solicited in person or by mail, telephone, fax, personal interviews or other methods of communication by Activision's directors, officers and employees, who will not receive any additional
compensation for these solicitation activities.

Activision
has retained the firm of Morrow & Co to assist Activision in the distribution and solicitation of proxies from Activision stockholders. Activision estimates that its
proxy solicitor fees will be approximately $25,000 plus out-of pocket expenses.

Based
on Activision's reasons for the transaction described in this proxy statement, the Activision board of directors believes that that the business combination agreement and all
related documents and exhibits thereto are in the best interests of the Company and its stockholders and recommends that you vote

If you have additional questions about the transaction after reading this proxy statement, or if you need assistance in submitting your proxy or voting your
shares, or if you need additional copies of the proxy statement or the enclosed proxy card, please contact:

The following is a description of the material aspects of the transaction, including the business combination agreement. While we believe
that the following description covers the material terms of the transaction, the description may not contain all of the information that is important to you. We encourage you to read carefully this
entire proxy statement, including the business combination agreement attached as Annex A to this proxy statement, for a more complete understanding of the transaction.

Background of the Transaction

On an annual basis, Activision reviews its strategic business plan including any strategic growth alternatives which could significantly accelerate the
achievement of its long-term growth objectives. In the course of the strategic planning reviews conducted during the June to September 2006 period, senior management of Activision
identified strategic opportunities that could create larger scale in international geographies as well as facilitate entry into high growth market segments, particularly MMOG, as one of Activision's
top priorities to further accelerate its growth and operating margin expansion. After consideration of various alternatives, senior management of Activision recommended pursuing the acquisition of, or
partnership with, Vivendi Games as a possible means to accomplish Activision's long-term growth objectives.

From
November 2006 to the end of March 2007, Messrs. Robert A. Kotick and Brian G. Kelly, Chairman and Chief Executive Officer and Co-Chairman of
Activision, respectively, and Jean-Bernard Lévy, Chairman and Chief Executive Officer of Vivendi, René Pénisson, a Vivendi director and
Chairman of Vivendi Games and Bruce L. Hack, the Chief Executive Officer of Vivendi Games, engaged in several preliminary discussions to explore a possible strategic combination or relationship
between Activision and Vivendi Games. The parties discussed a conceptual proposal in which Activision and Vivendi Games businesses would be combined and Vivendi would become the majority stockholder
of Activision, but no formal proposal or terms were discussed. During these meetings, Vivendi indicated that it was prepared to pay a control premium with respect to Activision's common stock acquired
in the proposed transaction.

At
the meeting, Vivendi presented a preliminary proposal pursuant to which (a) Vivendi Games would be merged with and into a subsidiary of Activision in exchange for Activision
common stock, (b) Vivendi would purchase an additional $1.1 billion of Activision common stock and (c) immediately prior to such transactions, Activision would pay a special cash
dividend to its stockholders totaling approximately $1.1 billion. Under Vivendi's proposal, Activision's common stock would be valued at a 20% premium for purposes of the merger and the share
purchase, and, after giving effect to the transactions, Vivendi would hold approximately 60% of Activision's outstanding shares of common stock on a fully diluted basis. As of April 12, 2007
such a premium would have resulted in a valuation of Activision's common stock at $23.38 per share.

On
April 20, 2007, Allen & Company presented Goldman Sachs with Activision's alternative proposal, which provided that (a) Vivendi Games would be merged with and
into a subsidiary of Activision in exchange for $6.0 billion of Activision common stock, (b) Vivendi would purchase an additional amount of Activision common stock and, (c) upon
completion of the merger and share purchase, Activision would commence a cash self-tender offer to purchase a portion of its outstanding

58

common
stock. The proposal further provided that, for purposes of the merger, share purchase and tender offer, Activision's common stock would be valued at a 35% premium over the 10-day
trading average prior to signing and that Vivendi would not participate in the tender offer. As of April 20, 2007 such a premium would have resulted in a valuation of Activision's common stock
at $26.56 per share. In addition, Activision proposed that it would issue warrants to Vivendi that would permit Vivendi to purchase up to an additional 5% of Activision's outstanding common stock at
the same per share transaction price.

On
April 30, 2007, Activision's board of directors held a regular meeting, in which representatives from Allen & Company also participated telephonically. At this meeting,
the representatives from Allen & Company reviewed the currently proposed terms and discussed various factors relating to the proposed transaction, including the proposed premiums, the strategic
rationale for the transaction and certain market factors.

Over
the next several weeks, representatives from Allen & Company and Goldman Sachs met several times to discuss variations of the proposed transaction, each with similar tenets
consisting of: (a) an acquisition of Vivendi Games in exchange for shares of Activision common stock; (b) the purchase of additional shares of Activision common stock by Vivendi;
(c) a post-closing
self-tender offer conducted by Activision for its outstanding shares of common stock; and (d) the use of the same per share transaction price, including the same control premium, in
each step of the proposed transaction; we collectively refer to these tenets in this proxy statement as the "basic principles." The variations discussed by Allen & Company and Goldman Sachs
during these meetings primarily involved (x) the premium to be paid with respect to Activision's common stock in connection with the proposed merger, share purchase and tender offer; and
(y) the aggregate number of shares to be tendered for by Activision in the post-closing tender offer.

On
May 11, 2007, at a regular meeting of the Activision board of directors, which was also attended by representatives of Skadden Arps, senior management presented the board of
directors with an update of the status of discussions with Vivendi. At this meeting, the board of directors formed a special committee comprised of Robert Corti, Robert Morgado and Richard Sarnoff.
The special committee was formed to review and evaluate the terms and conditions of the proposed transaction and to make recommendations to the board of directors as to whether the proposed
transaction or any other alternative proposals were in the best interests of Activision and its stockholders. At this meeting, representatives from Skadden Arps advised the board of directors on their
fiduciary duties in connection with consideration of the potential transaction as well as various other legal and regulatory issues that might arise in connection with the potential transaction.

On
May 16, 2007 and May 22, 2007, the special committee of Activision's board of directors held meetings with representatives from Allen & Company and Skadden Arps
to discuss the various proposals. The special committee recommended that Activision's senior management should continue discussions with Vivendi and explore means of (a) ensuring that
stockholders receive a control premium if a change of control were to occur, and (b) protecting existing stockholders in the event that Activision's common stock traded below the per share
transaction price after the closing of the proposed transaction.

On
May 23, 2007, Allen & Company presented Goldman Sachs with Activision's alternative proposal, which increased the per share transaction price to $25.50, valued Vivendi
Games at approximately $7.75 billion and required Vivendi to fund a potential cash distribution to non-Vivendi stockholders equal to the difference between the trading price at
closing and the $25.50 per share transaction price.

On
May 29, 2007, Mr. Kotick had a telephone call with Mr. Lévy during which Mr. Lévy indicated that Vivendi would consider
Activision's proposal, but would prefer to maintain the basic principles of its original proposal. The new Vivendi proposal followed the basic principles and proposed a $24.75 per share transaction
price (representing a 30% premium to the then-current trading price of Activision

59

common
stock). Accordingly, the proposal resulted in a $1.6 billion purchase of shares by Vivendi and an approximate $2.5 billion post-closing tender offer, which would be
funded with the cash contributed by Vivendi as well as Activision's cash on-hand.

On
June 11, 2007, Mr. Lévy telephoned Mr. Kotick to advise him that, due to the meaningful differences between the two companies' proposals and lack
of any apparent progress, he did not think it made sense to continue discussions concerning a possible transaction at that time.

On
June 15, 2007, the special committee of Activision's board of directors held a meeting and recommended that, if negotiations were to continue, Activision's senior management
should attempt to increase the aggregate size of the cash tender offer to ensure that the tender offer would provide liquidity to Activision's stockholders for a minimum of 50% of Activision's
outstanding shares of common stock.

Over
the next few weeks, Messrs. Lévy, Pénisson, Kotick and Kelly participated in several telephonic and in-person meetings concerning
reinitiating discussions about a possible transaction.

On
July 8, 2007, Mr. Kotick telephoned Mr. Lévy to present Activision's counter-proposal. The principal terms of Activision's proposal were generally
consistent with the basic principles. Further, based upon Activision's then-current stock price, Mr. Kotick indicated that a per share transaction price of $24.75 would be carefully
considered. Activision additionally proposed an increase in the size of the tender offer from $2.5 billion to $3.5 billion, which would be funded as follows: (a) the first
$2.4 billion would be funded by the proceeds of the share purchase and Activision's cash on hand; (b) the next $700 million would be funded by Vivendi's purchasing additional
shares of Activision common stock at the $24.75 per share transaction price; and (c) the remaining $400 million would be funded from a new credit facility to be obtained by Activision.

On
July 10, 2007, Mr. Lévy advised Mr. Kotick that the terms of Activision's proposal were generally acceptable to Vivendi, subject to both sides
completing satisfactory due diligence and acceptable documentation, and that Vivendi was willing to re-engage in negotiations around a possible transaction on the basis of the
July 8th proposal. Mr. Lévy and Mr. Kotick then discussed initiating a reciprocal due diligence process and a timeline for further discussions
and negotiations.

On
July 12, 2007, at a regular meeting of the Activision board of directors, which was also attended by representatives from Allen & Company and Skadden Arps, senior
management presented the board of directors with an update of the status of discussions with Vivendi. During this meeting, senior management and the board discussed engaging an outside consultant to
assist in (a) evaluating the sustainability of Blizzard Entertainment's subscriber base, including, among other things, an analysis of subscriber churn rates, sources of subscribers and
acquisition costs per subscriber and (b) identifying near-term and potential longer-term threats to Blizzard Entertainment's core subscriber base.

Throughout
the months of July and August, the parties and their legal advisors prepared and negotiated drafts of the business combination agreement and ancillary transaction documents
and the parties continued to conduct business, financial, accounting and legal due diligence.

On
August 13, 2007, August 23, 2007 and September 7, 2007, representatives of Activision's outside consultants presented to senior management of Activision their
preliminary due diligence findings, which discussed, among other things, an assessment of Blizzard Entertainment's subscriber base and its business model.

On
August 14, 2007, Vivendi Games conducted an all-day management presentation to members of Activision's management and its financial and legal advisors in Los
Angeles. Vivendi Games provided detailed information with respect to the historic and anticipated operating results of each of its divisions and included descriptions of their anticipated product
offerings and operational systems and demonstrations of gameplay. Vivendi Games' management responded to numerous questions from Activision and its advisors throughout the course of the day.

60

On
August 26, 2007, Activision made a comparable management presentation to Vivendi and Vivendi Games management and Vivendi's financial and legal advisors in New York.
Activision's management provided similar historic and anticipated operating results, as well as information on anticipated product offerings and demonstrations of gameplay.

On
August 27, 2007, Messrs. Lévy, Pénisson, Kotick and Kelly met to discuss open issues on the business combination agreement as well as
certain issues regarding post-transaction corporate governance of Activision and Blizzard Entertainment. Messrs. Kotick and Kelly emphasized that Activision and the special
committee of Activision's board of directors wanted to ensure that Activision's corporate governance after the closing of the proposed transaction would provide for management operational flexibility
to realize the proposed objectives and benefits of the combined operations as well as adequate protections for Activision's minority stockholders. In addition, management of both Vivendi and
Activision expressed concern with respect to the integration of two companies' existing corporate structures and, in particular, Vivendi wanted to ensure that Blizzard Entertainment would continue to
be managed by its current management team. Following this meeting, there remained several material open issues with respect to corporate governance, management structure and the terms of the business
combination agreement.

Over
the course of the next few weeks, representatives from Allen & Company and Skadden Arps met with Vivendi's financial and legal advisors to attempt to resolve the open issues.
Messrs. Lévy and Kotick also spoke several times by telephone during this period regarding the same.

On
September 6, 2007, the special committee of Activision's board of directors held a meeting to discuss the terms and conditions of the draft business combination agreement,
ancillary agreements, the
proposed form of the certificate of incorporation and bylaws of the combined company. Representatives from Skadden Arps presented summaries of the open issues remaining with respect to each of these
draft documents. Additionally, representatives from Skadden Arps advised the special committee with respect to the fiduciary duties of Activision's board of directors in connection with consideration
of the proposed transaction. The special committee recommended that management continue its negotiations regarding the proposed transaction with a view toward obtaining better corporate governance and
operational provisions and protections for Activision's existing stockholders.

On
September 14, 2007, after little progress on the open issues, Mr. Kotick telephoned Mr. Hack to inform him that, given the number of material open issues
remaining, it did not made sense to continue discussions regarding a possible transaction at that time.

However,
on September 17, 2007, Mr. Kotick attended a previously scheduled dinner with Mr. Morhaime and other members of the Blizzard Entertainment management team.
At this dinner, Messrs. Kotick and Morhaime discussed the potential management structure of Blizzard Entertainment if a transaction were to occur.

On
September 20, 2007, Mr. Kotick telephoned Mr. Lévy to propose a post-closing management and corporate governance structure, and
inquired if Vivendi would be interested in continuing discussions regarding this proposed structure as well as the other open issues.

On
September 21, 2007, Mr. Lévy and Mr. Pénisson advised Mr. Kotick that Vivendi would be willing to continue discussions and
over the next several weeks Mr. Lévy and Mr. Kotick had several telephone conversations regarding the remaining open issues.

During
this period, representatives from Allen & Company and Skadden Arps held discussions and negotiations with Vivendi's financial and legal advisors to finalize the terms of
the business combination agreement and ancillary documents. Over this same period, the parties worked to complete their respective due diligence reviews and to respond to follow-up
requests. The parties also continued to negotiate the terms and conditions of the corporate governance and management structure of Activision and Blizzard Entertainment in the event the proposed
transaction closed.

61

On
October 30, 2007, Activision's board of directors held a regularly scheduled meeting at which the status of the proposed transaction with Vivendi and Activision's second fiscal
quarter results were discussed. The board recommended that Activision's management continue its discussions with Vivendi.

Throughout
early November, Messrs. Tippl and Grollemund had several discussions regarding the updated financial results and outlooks of both Activision and Vivendi Games since the
completion of the parties' reciprocal due diligence reviews. In addition, representatives from Allen & Company and Goldman Sachs had several discussions regarding the principal financial terms
of the proposed transaction in light of the financial performance of the companies since the beginning of discussions.

During
this period, Allen & Company advised Goldman Sachs that Activision believed the previously discussed per share transaction price of $24.75 should be increased due to
Activision's recent and anticipated financial performance and the increased trading price of its common stock.

On
November 13, 2007, Goldman Sachs advised Allen & Company that Vivendi was prepared to increase the per share transaction price from $24.75 to an amount between $26.25
and $26.75 and would correspondingly increase the amount of cash used in the share purchase. In addition, Goldman Sachs indicated that Vivendi would also be willing to increase the cash component of
the funding for the tender offer by an amount sufficient to provide for the purchase of up to 50% of Activision shares outstanding immediately prior to the transactions at the per share transaction
price.

On
November 26, 2007, representatives of Activision, together with its financial and legal advisors, met with representatives of Vivendi and their financial and legal advisors in
New York. During the course of this meeting, Vivendi proposed a per share transaction price of $26.50; however, Activision countered that the then-current trading price of its common
stock, the recent earnings release, and revised guidance to be provided by Activision for fiscal year 2008 all warranted a higher premium. Vivendi thereafter proposed a per share transaction price of
$27.25, but Activision maintained that a higher price was justified. After further discussion, Vivendi agreed to increase its offer to $27.50 (representing a 45.2% premium to the then-current trading
price of Activision common stock) and agreed that the resulting increase in the amount of cash paid to Activision would be used to increase the aggregate amount of Activision shares to be purchased by
Activision in the tender offer. Mr. Kotick indicated that he would present the $27.50 per share transaction price and other terms to Activision's board of directors for their consideration.

From
November 26 to November 29, 2007, the parties' legal advisors worked to finalize the business combination agreement, disclosure schedules and ancillary agreements. On
November 29, 2007, the parties and their legal and financial advisors participated in a telephonic meeting to confirm that, subject to the approval of the Vivendi and Activision boards of
directors, the terms and conditions of the business combination agreement and related ancillary agreements were finalized.

On
November 30, 2007, Vivendi's management and supervisory boards met to consider the proposed transaction, including the business combination agreement and the ancillary
agreement, and unanimously approved the terms thereof.

On
December 1, 2007, the Activision board of directors held a special meeting to discuss the proposed transaction, including the terms and conditions of the business combination
agreement and the ancillary agreements. At this meeting, representatives from Allen & Company reviewed the material financial analyses prepared in connection with the preparation of its
fairness opinion. Allen & Company then delivered its oral opinion that, taking into account the transactions contemplated by the business combination agreement as a whole, the per share
transaction price of the share purchase, the exchange ratio of the merger and the per share transaction price of the tender offer were fair, from a financial point of view, to Activision and its
stockholders. Representatives from Skadden Arps reviewed for the board the fiduciary duties of directors in considering the proposed transaction and presented summaries of the terms of the business
combination agreement and the ancillary agreements. After discussion, Activision's board of directors unanimously determined that (a) the business combination

62

agreement
and all related documents and exhibits thereto, in each case substantially in the form presented to the board, are in the best interests of Activision and its stockholders, (b) taking
into account the transactions contemplated by the business combination agreement as a whole, the per share transaction price of the share purchase, the exchange ratio and the per share transaction
price of the tender offer are fair, from a financial point of view, to Activision and its stockholders, and (c) the merger is advisable under Section 251(b) of the DGCL.

Following
the Activision board meeting, the parties executed the business combination agreement and ancillary documents.

On
December 2, 2007, Activision and Vivendi issued a joint press release announcing the transaction.

Activision's Reasons for the Transaction and Tender Offer

Reasons for the Transaction and Tender Offer and Recommendations

In evaluating the business combination agreement and the proposed transaction, including the merger, the share purchase, the tender offer, and the amendment and
restatement of our certificate of incorporation and bylaws, and recommending that holders of Activision's common stock vote in favor of the proposals described in this proxy statement, the Activision
board of directors consulted with Activision's senior management, financial and legal advisors, as well as the special committee of the Activision board of directors and outside consultants, and
considered a number of factors, including the
following material factors, which the Activision board of directors viewed as supporting its recommendations:



Unique Market Opportunity. The Activision board considered the potential benefits of combining Vivendi Games'
interactive entertainment business, including Blizzard Entertainment's highly successful World of Warcraft MMORPG franchise, with Activision, including
the prospect of creating the world's leading pure-play online and console game publisher and the potential to accelerate Activision's growth and expand its operating margins. In
considering this opportunity, the Activision board took into account factors such as the competitive landscape of, and trends in, the interactive entertainment industry, other strategic alternatives
likely to be available to Activision, the results of Activision's due diligence review of Vivendi Games, discussions with management of Vivendi Games and Vivendi and the presentations and evaluations
by Activision's financial advisor and outside consultants.



Expansion into Online Gaming and New Geographies. The Activision board considered that the proposed transaction
would facilitate Activision's expansion into the higher operating margin and fast growing MMOG genre and would provide scale benefits to its international business, including establishing a meaningful
presence in the rapidly growing Asian markets, which Activision's senior management had identified as top strategic priorities.



Combining Industry Leaders. The Activision board considered that the proposed transaction would combine leaders
in mass-market entertainment and subscription-based online games, which would enable the combined company to more effectively leverage and diversify its combined product portfolios. In
particular, the Activision board considered that the proposed transaction would bring together the world's leading MMORPG franchise, World of Warcraft,
and other successful Vivendi Games titles with Activision's top-selling owned and licensed franchises, enabling the combined company to establish leading positions across the competitive
interactive entertainment software industry and reach a broader audience.



Diversification of Activision's Revenue Base. The Activision board considered that the proposed transaction
would enable Activision to diversify its revenue base among subscription-based online, console and PC formats, as well as wireless and other emerging technologies, providing

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Activision
with a broader platform to capitalize on industry growth as well as a recurring stream of subscription-based revenue.



Premium to Market Price. The Activision board considered the current and historical market prices of
Activision's common stock and the fact that the per share transaction price of $27.50 per share represented an approximate 24.2% premium over the closing price of Activision's common stock on
November 30, 2007, the last trading day prior to the execution of the business combination agreement, and approximately 33.7% and 26.8% premiums over the closing prices of Activision's common
stock over the 10 and 30 trading days, respectively, prior to the date of the execution of the business combination agreement.



Tender Offer; Liquidity to Stockholders; Certainty of Value. The Activision board considered the liquidity and
premium to be offered to Activision's stockholders in connection with the proposed post-closing tender offer, including the number of shares to be purchased by the combined company and the
other terms and conditions of the tender offer, including restrictions on the ability of Vivendi and certain members of Activision's senior management to participate in the offer, and the fact that
Activision's stockholders would be entitled to realize $27.50 per share for shares sold in connection with the tender offer. The Activision board also considered that the tender offer would offer the
flexibility of not requiring Activision stockholders to tender any or all of their shares in the tender offer, thereby allowing Activision stockholders the option not to tender their shares in the
tender offer if they are able to achieve a higher price in the market or otherwise desired to retain ownership of their shares of the combined company.



Experience and Track Record of the Management Team. The Activision board considered the experience and track
record of Vivendi Games' management team, as well as the terms and conditions of the employment agreements of the key members of such management and their overall fit within Activision's current
management structure.



Successful Operating Model. The Activision board considered the ability of the combined company to continue
using the successful publishing and distribution models and operations team currently employed by Activision Publishing and Blizzard Entertainment.



Corporate Governance. The Activision board considered the post-closing corporate governance
structure of the combined company, including the minority stockholder and other protections provided in the proposed amended and restated certificate of incorporation and bylaws of Activision, which
will be implemented effective as of closing of the transaction.



Special Committee. The Activision board considered the recommendations of the special committee of the
Activision board of directors and its views regarding the terms and financial aspects of the transaction.



Regulatory and Stockholder Approvals. The Activision board considered the regulatory and stockholder approvals
required in connection with the transaction and the other terms of the business combination agreement, and the likelihood that, once the business combination agreement had been entered into, the
transaction would be completed if the issuance of Activision common stock in accordance with the terms of the business combination agreement and the amendment and restatement of our certificate of
incorporation were approved by our stockholders and the transaction was approved by applicable regulatory agencies. The Activision board also considered certain regulatory and other approvals required
if Activision were to partner with, or be acquired by, other industry participants and the likelihood as to whether such approvals could reasonably be expected to be received.



Amended Employment Agreements. The Activision board considered the amended and restated employment agreements to
be entered into with Robert A. Kotick concurrently with the execution of the business combination agreement, pursuant to which Mr. Kotick would serve as President and Chief Executive
Officer of Activision Blizzard, and Brian G. Kelly, pursuant to

64

which
Mr. Kelly would serve as the Co-Chairman of Activision Blizzard, the waiver of certain change in control benefits to which Messrs. Kotick and Kelly may have been
entitled as a result of the transaction, and the resulting increased likelihood that the members of Activision's senior management would remain in place at Activision Blizzard for a substantial period
following completion of the transaction.



No Financing Condition; Vivendi Credit Facility. The Activision board considered the substantial financial
resources of Vivendi, the lack of financing condition in the business combination agreement and Vivendi's available cash resources and financing in an amount sufficient to enable Vivendi to complete
the share purchase and the other transactions contemplated by the business combination agreement. The Activision board also considered the current state of the credit markets generally and Vivendi's
commitment in the business combination agreement, under certain circumstances, to lend Activision certain amounts needed to complete the tender offer on arms-length terms, subject to the
terms and conditions set forth in the business combination agreement.



Ability to Respond to Certain Unsolicited Acquisition Proposals. The Activision board considered Activision's
ability under certain circumstances, pursuant to the business combination agreement, to engage in negotiations or discussions with, and to provide information to, any third party that made after the
date of the business combination agreement and prior to Activision stockholder approval an "Activision Acquisition Proposal" (as such term is defined in the business combination agreement) and that
the Activision board determines in good faith (after consultation with its outside counsel and a financial advisor of nationally recognized reputation) constitutes, or is reasonably likely to lead to,
an "Activision Superior Proposal" (as such term is defined in the business combination agreement).



Ability to Terminate the Business Combination Agreement to Accept an Activision Superior Proposal. The Activision board
considered Activision's ability, following receipt of an Activision Superior Proposal after the date of the business combination agreement and prior to Activision stockholder approval, to change its
recommendation with respect to the transaction and terminate the business combination agreement if certain conditions are satisfied, including if the Activision board determines in good faith, after
consultation with outside counsel, that its failure to take such action would be reasonably expected to constitute a breach of its fiduciary duties under applicable law, that at least three
(3) business days prior written notice is given to Vivendi of the Activision board's intent to take such action, and Activision requirement to pay Vivendi a $180 million termination fee
and reimburse Vivendi for up to $15 million of expenses in connection with any such termination.



Terms of Business Combination Agreement. The Activision board considered the terms of the business combination
agreement, the investor agreement, the amendment and restatement of the certificate of incorporation and bylaws of the combined company, and the other agreements relating to the proposed transaction,
including the respective representations, warranties, covenants and termination rights of the parties, the termination fee and expenses payable in certain circumstances by Activision, and the fact
that the terms of such agreements and the termination fee are favorable to Activision's stockholders.



Termination Fee. The Activision board considered its discussions with Allen & Company that the
termination fee of $180 million that could become payable pursuant to the business combination agreement under certain circumstances, including if Activision terminates the business combination
agreement to accept an Activision Superior Proposal or if Vivendi terminates the business combination agreement because the Activision board changes its recommendation with respect to the transaction,
was unlikely to be a significant deterrent to competing acquisition offers.

65



Allen & Company Opinion. The Activision board considered the financial analyses and opinion of
Allen & Company delivered orally to Activision's board on December 1, 2007 and subsequently confirmed in writing, to the effect that, as of the date of its opinion and based upon and
subject to the qualifications, limitations and assumptions set forth therein, taking into account the transactions contemplated by the business combination agreement as a whole, the per share
transaction price of the share purchase, the exchange ratio of the merger and the per share transaction price of the tender offer were fair, from a financial point of view, to Activision and its
stockholders. For further discussion of Allen & Company's opinion, see "Opinion of Activision's Financial Advisor" below.

Reasons Against the Transaction and Tender Offer and Recommendations

In the course of its deliberations, the Activision board of directors also considered a variety of risks and other potentially negative factors concerning the
transaction, including the following:



No Future Change of Control Transactions. The Activision board considered that the closing of the transaction,
which is expected to result in Vivendi owning approximately 52.2% of the issued and outstanding shares of Activision Blizzard common stock on a fully diluted basis (approximately 68.0% if the tender
offer is fully subscribed), would discourage a third party from making an offer to acquire Activision Blizzard in the future unless Vivendi supported such offer and could prevent Activision
stockholders from receiving any additional "control premium" following completion of the transaction and the tender offer.



Proration in Tender Offer. The Activision board considered that Activision stockholders would be subject to
proration if the tender offer is oversubscribed, effectively limiting an Activision stockholder to selling approximately 50% of its holdings if the offer is fully subscribed. The Activision board also
considered that the market price of Activision Blizzard common stock could be higher than $27.50 at the time the tender offer is launched and that there is no obligation of Activision Blizzard or
Vivendi to offer a higher price, and that the total value to Activision stockholders will vary based on the number of shares, if any, ultimately tendered in the tender offer.



Effect on Third Party Offers. The Activision board considered that the terms of the business combination
agreement restricting Activision's solicitation of third party acquisition proposals, providing for Activision's payment of a termination fee and expense reimbursement to Vivendi in specified
circumstances, and the terms of the voting agreements entered into by certain Activision executives, could limit the willingness of a third party to propose a competing transaction with Activision.



Control by Vivendi. The Activision board considered that following completion of the transaction Vivendi will
own approximately 52.2% of the issued and outstanding shares of Activision Blizzard common stock on a fully diluted basis and approximately 68.0% if the tender offer is fully subscribed, will control
a majority of our board of directors, and will have certain other corporate governance and other rights provided in our amended and restated certificate of incorporation and bylaws, which generally
impose significant restrictions on the board composition and corporate governance of Activision Blizzard following the completion of the transaction.



No Standstill. The Activision board considered that, subject to certain limitations, following completion of the
transaction Vivendi is not prohibited from acquiring additional shares of common stock or other securities of Activision Blizzard in the market, directly from third parties, or otherwise.

66



Additional Debt. The Activision board considered the effect on Activision Blizzard if additional debt is
required to be incurred from a third party or Vivendi in connection with financing a portion of the tender offer.



Realization of Synergies. The Activision board considered the possibility that the synergies and other financial
and strategic benefits expected to be achieved in the transaction may not be obtained on a timely basis or at all.



Effect on Failure to Complete Transaction. The Activision board considered the risks and costs that could be
borne by Activision if the transaction is not completed, including the diversion of management and employee attention during the period after the signing of the business combination agreement,
potential employee attrition and the potential effect on Activision's business and client relations.



Interim Restrictions on Activision's Business. The Activision board considered that, under the business
combination agreement, Activision must conduct its business in the ordinary course and is subject to a variety of other restrictions on the conduct of its business prior to completion of the
transaction or termination of the business combination agreement, which may delay or prevent Activision from pursuing business opportunities that may arise.



Transaction Costs. The Activision board considered the significant costs involved in connection with entering
into the business combination agreement and completing the transaction and the tender offer, and potential related disruptions to the operations of Activision's business.



Required Regulatory Approvals. The Activision board considered the fact that regulatory approvals (including
approvals in the European Union) and third party consents are required to consummate the transaction and the prospects for receiving any such approvals and consents, if necessary.



Risks Related to Vivendi Games' Businesses. The Activision board considered the prospects for Vivendi Games'
businesses and the costs associated with both the continuation and potential discontinuation of certain of Vivendi Games' businesses.



Interests of Activision Management. The Activision board considered the fact that some of Activision's
executives, including the Chief Executive Officer, who is a member of the Activision board, may have interests in the transaction that are different from, or in addition to, those of Activision's
common stockholders, as a result of the employment and other agreements referred to in "Board and Management of Activision Blizzard" below of this proxy statement and their holding of shares and
options to purchase shares of Activision common stock.

The
foregoing discussion of the information considered by Activision's board of directors is not exhaustive, but includes the material factors that Activision's board of directors
considered in approving and recommending the transaction. In view of the wide variety of factors considered by the board of directors in connection with its evaluation of the transaction and the
complexity of these factors, the board of directors did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign any specific or relative weights to the specific factors
that it considered in reaching its decision. The board of directors discussed the factors described above, including asking questions of Activision's senior management and financial and legal
advisors, and reached a consensus that the transaction was in the best interests of Activision and its stockholders. In considering the factors described above, individual directors may have assigned
different weights to different factors. Activision's board of directors relied on the experience and expertise of its financial advisors for quantitative analysis of the financial terms of the
transaction. See below under "Opinion of Activision's Financial Advisor."

The
above explanation of the reasoning of Activision's board of directors and all other information presented in this section is forward-looking in nature and, therefore, should be read
in light of the factors discussed under "Cautionary Statement Concerning Forward-Looking Statements."

67

For the reasons set forth above, Activision's board of directors has unanimously approved the business combination agreement, the other agreements entered into in
connection with the business combination agreement and the transactions contemplated by those agreements, has concluded that the transaction is advisable and in the best interests of Activision and
its stockholders and unanimously recommends that Activision stockholders vote for the issuance of Activision common stock in accordance with the terms of the business combination agreement, the
amendment and restatement of our certificate of incorporation, including each of the related sub-proposals, and the amendment of Section 7.4(a) of Activision's third amended and
restated bylaws.

Opinion of Activision's Financial Advisor

Allen & Company LLC has acted as our financial advisor in connection with the transaction. In connection with Allen & Company's engagement as
our financial advisor, we requested that Allen & Company evaluate the fairness, from a financial point of view, of the per share transaction price of the share purchase, the exchange ratio of
the merger and the per share transaction price of the tender offer, to Activision and its stockholders, taking into account the transactions contemplated by the business combination agreement as a
whole. On December 1, 2007, Allen & Company delivered its oral opinion, subsequently confirmed in writing, to our board of directors to the effect that, as of the date of its opinion and
based upon and subject to the qualifications, limitations and assumptions set forth therein, taking into account the transactions contemplated by the business combination agreement as a whole, the per
share transaction price of the share purchase, the exchange ratio of the merger and the per share transaction price of the tender offer were fair, from a financial point of view, to Activision and its
stockholders.

The summary of Allen & Company's written opinion in this proxy statement is qualified in its entirety by reference to the full text of Allen &
Company's written opinion, dated December 1, 2007, attached to this proxy statement as Annex D. You are urged to, and should, read Allen & Company's written opinion carefully and
in its entirety. Allen & Company's written opinion addresses only the fairness, from a financial point of view, of the per share transaction price of the share purchase, the exchange ratio of
the merger and the per share transaction price of the tender offer to Activision and its stockholders, taking into account the transactions contemplated by the business combination agreement as a
whole, as of the date of Allen & Company's written opinion, and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matter relating to
the transaction.

In
arriving at its opinion, Allen & Company, among other things:



reviewed
and analyzed the terms and conditions of the transaction including the draft business combination agreement and the draft agreements ancillary thereto (none of
which prior to the delivery of the opinion had been executed by the parties);



reviewed
trends in the interactive entertainment industry including, but not limited to, MMOGs;



reviewed
public financial information with respect to both Activision and Vivendi Games (a subsidiary of Vivendi);



reviewed
public financial and transaction information involving companies both in the interactive entertainment industry as well as in the broader entertainment industry,
which Allen & Company deemed to be comparable to Activision and Vivendi Games as well as transaction information with respect to comparable transactions;



reviewed
public financial and transaction information involving companies which have engaged in self-tender offers;

68



reviewed
and analyzed the present financial condition and business prospects of both Activision and Vivendi Games obtained from meetings and conversations with both
companies' senior management;



reviewed
historical and projected business information and financial results of Activision and Vivendi Games obtained from meetings and conversations with both companies'
senior management;



reviewed
other information obtained from meetings with senior management of both Activision and Vivendi Games;



reviewed
and analyzed the trading history of Activision's common stock and certain comparable companies;



utilized
Allen & Company's familiarity, developed in the course of serving as financial advisor to Activision (and also developed in connection with the negotiation
of the transaction), with Activision's business and prospects, as well as prevailing trends in the markets in which Activision and Vivendi Games compete;



conferred
with the management team of Activision with respect to the proposed transaction;



reviewed
and analyzed the prospective value of Activision's common stock as of the closing of the transaction and immediately following the completion of the tender offer;
and



conducted
such other financial analyses and investigations as Allen & Company deemed necessary or appropriate for the purposes of the opinion expressed therein.

In
connection with its review, Allen & Company did not assume any responsibility for independent verification of any of the information utilized in its analyses and relied upon
and assumed the accuracy and completeness of all of the financial, accounting, tax and other information that was available to Allen & Company from public sources, that was provided to them by
Activision and Vivendi Games or their respective representatives, or that was otherwise reviewed by them. With respect to the projected business information and financial results that Allen &
Company reviewed, Allen & Company was advised by Activision's management, and Allen & Company assumed, that such forecasts had been reasonably prepared in good faith reflecting the best
currently available estimates and judgments of Activision's and Vivendi Games' management as to their respective future financial performance. Allen & Company assumed no responsibility for such
forecasts or the assumptions on which they were based.

Allen &
Company also assumed, with Activision's consent, that the transaction would be consummated in accordance with the terms and conditions set forth in the draft business
combination agreement and the draft agreements ancillary thereto that it reviewed. Allen & Company neither conducted a physical inspection of the properties and facilities of Activision or
Vivendi Games nor, except as specifically set forth in the opinion, made or obtained any evaluations or appraisals of the assets or liabilities of Activision or Vivendi Games, or conducted any
analysis concerning the solvency of Activision or Vivendi Games. Allen & Company's opinion addressed only the fairness, from a financial point of view, of the per share transaction price of the
share purchase, the exchange ratio of the merger and the per share transaction price of the tender offer, to Activision and its stockholders, taking into account the transactions contemplated by the
business combination agreement as a whole, and did not address any other aspect or implication of the transaction or any other agreement, arrangement or understanding entered into in connection with
the transaction or otherwise. Allen & Company's opinion was necessarily based upon information made available to it as of the date of its opinion, and upon financial, economic, market and other
conditions as they existed and could be evaluated on the date of Allen & Company's opinion. Allen & Company's opinion did not address the relative merits of the transaction as compared
to other business strategies that might have been

69

available
to Activision, nor did it address Activision's underlying business decision to proceed with the transaction. Allen & Company did not express an opinion as to the price at which any
shares of capital stock of Activision would trade either before or after the transaction or the tender offer. Allen & Company did not express an opinion about the fairness of any compensation
payable to any of Activision's insiders in connection with the transaction, relative to the compensation payable to Activision's public stockholders. Allen & Company did not express any opinion
as to any tax or other consequences that might result from the transaction, nor did Allen & Company's opinion address any legal, tax, regulatory or accounting matters, as to which
Allen & Company understood that Activision obtained such advice as it deemed necessary from qualified professionals.

In
preparing its opinion, Allen & Company performed a number of financial and comparative analyses, including those described below. The preparation of a fairness opinion is a
complex process and is not necessarily susceptible to partial analysis or summary description. Allen & Company believes that its analyses must be considered as a whole and that selecting
portions of its analyses and of the factors considered by it, without considering all analyses and factors, could create a misleading view of the processes underlying its opinion. No company or
transaction used in the analyses performed by Allen & Company as a comparison is identical to Activision or the contemplated transaction. In addition, Allen & Company may have given some
analyses more or less weight than other analyses, and may have deemed various assumptions more or less probable than other assumptions, so that the range of valuation resulting from any particular
analysis described below should not be taken to be Allen & Company's view of the actual value of Activision or Vivendi Games. The analyses performed by Allen & Company are not
necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of
businesses or assets do not purport to be appraisals or to necessarily reflect the prices at which businesses or assets may actually be sold. The analyses performed were prepared solely as part of
Allen & Company's analysis of the fairness, from a financial point of view, of the per share transaction price of the share purchase, the exchange ratio of the merger and the per share
transaction price of the tender offer, to Activision and its stockholders, taking into account the transactions contemplated by the business combination agreement as a whole, and were provided to the
board of directors in connection with the delivery of Allen & Company's opinion.

The
following is a summary of material financial analyses performed by Allen & Company in connection with the preparation of its opinion, and reviewed with the Activision board of
directors at a meeting held on December 1, 2007. Certain of the following summaries of financial analyses that were performed by Allen & Company include information presented in tabular
format. In order to understand fully the material financial analyses that were performed by Allen & Company, the tables should be read together with the text of each summary. The tables alone
do not constitute a complete description of the material financial analyses.

Allen &
Company determined that the following methodologies were most appropriate in undertaking its analysis of the fairness, from a financial point of view, of the per share
transaction price of the share purchase, the exchange ratio of the merger and the per share transaction price of the tender offer, to Activision and its stockholders, taking into account the
transactions contemplated by the business combination agreement as a whole.

Per Share Transaction Price of the Share Purchase

Allen & Company used the following methodologies to evaluate the fairness of the $27.50 per share transaction price for shares issued by Activision in the
share purchase: (a) comparable company premium analysis; (b) comparable company multiples analysis; (c) comparable precedent transaction analysis; and (d) a discounted cash
flow ("DCF") analysis.

70

Comparable Company Premium Analysis. Allen & Company compared the per share transaction price of the share purchase to
various measures relating to the price of Activision's common stock between the dates of November 1, 2007 and November 29, 2007. These measures included (a) the closing price;
(b) the 10-day trailing average closing prices; (c) the 4-weeks prior closing prices and (d) the 20-day trailing average closing prices.
Allen & Company calculated that the premium represented by the per share transaction price of the share purchase ranged from 19% - 45% to the closing prices, 19% - 37% to the 10-day
trailing average closing prices, 16% - 25% to the 4-weeks prior closing prices and 20% - 30% to the 20-day trailing average closing prices during the time period between
November 1, 2007 and November 29, 2007. As of the closing price on November 29, 2007, the premium represented by the per share transaction price of the share purchase was 25% to
the closing price, 35% to the 10-day trailing average closing price, 20% to the 4-weeks prior closing price and 30% to the 20-day trailing average closing price.

Allen &
Company also analyzed and examined the transaction premiums paid in approximately 1,260 other transactions comprised of completed acquisitions of all domestic companies,
excluding financial institutions, which were acquired from January 1, 2002 through November 28, 2007. Allen & Company found that the per share transaction price of $27.50
represented premiums to Activision's closing price and 4-weeks prior price that were within the range of premiums paid in comparable change of control transactions.

Comparable Public Company Multiples Analysis. Although Allen & Company believed that no companies were directly
comparable to Activision, it nonetheless analyzed and examined current trading multiples for companies which it considered similar to, or which operate within the same industry as, Activision.

Specifically,
Allen & Company analyzed the common stock prices and market multiples of the following comparable publicly-traded companies which were either in the interactive
entertainment industry or the broader entertainment industry.

Interactive Entertainment



Electronic
Arts;



THQ;



Take
Two Interactive; and



Ubisoft
Entertainment.

General Entertainment



Lions
Gate Entertainment;



Dreamworks
Animation; and



Warner
Music Group.

Allen &
Company calculated various valuation multiples, including: (a) the ratio of share price to the estimated earnings per share, or EPS, and (b) the ratio of
enterprise value, or EV, to the estimated earnings before interest, taxes, depreciation and amortization, or EBITDA, on a projected calendar year basis for 2007, 2008 and 2009 for each of the seven
companies identified above. Allen & Company determined that the per share transaction price of the share purchase implied enterprise and equity value multiples within or above the range of
multiples of the comparable publicly traded companies in

71

both
the interactive entertainment industry as well as in the broader entertainment industry. EBITDA and EPS projections and estimates were derived from Wall Street analyst research.

Multiples Implied by
Per Share Transaction
Price of $27.50

Range of Multiples from
Comparable Publicly-Traded
Companies

EV / CY07 EBITDA

21.7x

6.1x - 35.0x

EV / CY08 EBITDA

17.9x

7.4x - 37.0x

EV / CY09 EBITDA

15.6x

7.5x - 18.7x

Price / CY07 EPS

34.7x

9.4x - 54.9x

Price / CY08 EPS

28.5x

11.0x - 61.2x

Price / CY09 EPS

25.5x

8.8x - 32.1x

Comparable Precedent Transaction Analysis. Allen & Company reviewed selected precedent transactions that had
announcement dates between 1998 and 2007 and had publicly-disclosed information or industry analyst estimates from which purchase price multiplies could be derived. Finding that there were no
transactions of comparable scale in the interactive entertainment industry, Allen & Company examined the broader entertainment industry for acquired businesses having characteristics similar to
Activision. Transactions analyzed in the broader entertainment industry included:



Terra
Firma Capital's acquisition of EMI Group;



Walt
Disney's acquisition of Pixar;



Sony-led
investor consortium's purchase of Metro-Goldwyn-Mayer;



Combination
of Vivendi Universal Entertainment LLLP and National Broadcasting Company, Inc. to form NBC Universal; and



The
Seagram Company Ltd.'s acquisition of PolyGram N.V.

As
indicated by the chart below, Allen & Company determined that the per share transaction price of the share purchase implies enterprise and equity value multiples for Activision
that were above or within the range of multiples paid in comparable transactions in the broader entertainment industry.

Multiples Implied by
Per Share Transaction
Price of $27.50

Range of Multiples from
Comparable Transactions in
Broader Entertainment Industry

Enterprise Value / LTM EBITDA

34.7x

16.1x - 29.3x

Enterprise Value / Forward EBITDA

21.7x

13.2x - 19.7x

Equity Value / LTM Net Income

51.4x

30.8x - 49.7x

Equity Value / Forward Net Income

34.7x

28.0x - 35.4x

Discounted Cash Flow Analysis. Allen & Company's DCF approach was based upon certain financial projections and
estimates for Activision derived from Wall Street analyst reports. Allen & Company used a DCF analysis to identify a range of present values for Activision's common stock based upon terminal
forward P/E multiples ranging from 21x - 25x and discount rates ranging from 12% - 13%. Allen & Company determined that the per share transaction price exceeded the range of values indicated by
its DCF analysis.

Exchange Ratio of the Merger

Allen & Company relied on a sum-of-the-parts valuation analysis to value Vivendi Games and to determine the fairness,
from a financial point of view, of the exchange ratio of the merger to Activision. Allen & Company utilized a variety of methodologies to analyze the four business units that

72

comprise
Vivendi Games: (a) Blizzard Entertainment; (b) Sierra; (c) Sierra Online; and (d) Vivendi Games Mobile. The following is a summary of the analyses performed for
each of the business units.

Blizzard Entertainment. Allen & Company performed a (a) comparable public company analysis, (b) a
precedent transaction analysis and (c) a DCF analysis in order to establish a value range for Blizzard Entertainment. Based on the foregoing analyses, Allen & Company determined a value
range for Blizzard Entertainment of $8.2 billion - $9.0 billion.

Comparable Public Company Analysis. Allen & Company analyzed the common stock prices and
market multiples of eleven comparable publicly-traded companies which were classified as either MMOGs or diversified publishers. MMOGs examined by Allen & Company included Giant Interactive
Group, NCSoft, Netease.com, Perfect World Co., Shanda Interactive Entertainment and The9 Limited. Diversified publishers included Electronic Arts, Activision, THQ, Take Two Interactive and
Ubisoft Entertainment. Allen & Company selected a range of enterprise and equity value multiples for Blizzard Entertainment based upon the trading multiples of comparable public companies
evaluated, as indicated in the chart below.

Selected Multiple
Range for Blizzard
Entertainment

Range of Multiples for
MMOG Industry

Range of Multiples for
Diversified Publishers

EV / CY07 EBITDA

15.5x - 16.5x

9.3x - 27.2x

16.6x - 35.0x

EV / CY08 EBITDA

13.5x - 14.5x

5.8x - 15.5x

9.7x - 24.0x

EV / CY09 EBITDA

11.5x - 13.0x

4.2x - 13.2x

7.7x - 18.7x

Price / CY07 EPS

21.0x - 22.0x

15.8x - 30.1x

27.7x - 54.9x

Price / CY08 EPS

18.0x - 19.0x

12.7x - 19.2x

11.0x - 40.5x

Price / CY09 EPS

15.5x - 16.5x

8.1x - 16.7x

8.8x - 32.1x

Precedent Transaction Analysis. Allen & Company's precedent transaction analysis focused
solely on minority-stake acquisitions of comparable companies. Specifically, Allen & Company evaluated Electronic Arts' acquisition of a 15% stake in The9 Limited which was announced on
May 21, 2007. The purchase price of the minority stake in The9 Limited implied an enterprise value to forward EBITDA multiple of 16.9x and a forward P/E multiple of 26.5x for The9 Limited.

Discounted Cash Flow Analysis. Allen & Company estimated the after-tax
unlevered free cash flow for Blizzard Entertainment beginning with the second quarter of 2008 through year-end 2012. Projections for 2008 and 2009 were obtained from Vivendi Games
management, and Allen & Company extrapolated from these projections Blizzard's results for 2010 through 2012. Allen & Company discounted the free cash flows back to a present value as of
December 1, 2007 using discount rates ranging from 10.5% to 12.5%. In addition, Allen & Company
assumed perpetuity growth rates ranging from 4.0% to 6.0% in order to calculate a terminal value. Using the midpoint for the range of discount rates of 11.5% and a range of perpetuity growth rate
assumptions from 4.5% to 5.5%, the DCF analysis indicated an enterprise value for Blizzard Entertainment ranging from $7.7 billion to $8.8 billion.

Based
upon the enterprise values implied for Blizzard Entertainment by the valuation methodologies described above, Allen & Company estimated a value range for Blizzard
Entertainment of $8.2 billion to $9.0 billion.

Allen &
Company also examined Wall Street analyst valuations for Vivendi Games. As of the date of Allen & Company's opinion, many of the published valuations for Vivendi
Games ascribed by Wall Street analysts were significantly below Allen & Company's estimated value range for Blizzard Entertainment. As of the date of Allen & Company's opinion, Vivendi
had not publicly disclosed separate financial performance data for the individual businesses of Vivendi Games. As such, Wall Street analyst valuations were predicated upon operating income and cash
flow measures consolidating

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estimated
losses from Sierra, Sierra Online and Vivendi Games Mobile. In certain cases, Wall Street analysts provided transparency on valuation methodologies employed to derive the valuation estimate
published for Vivendi Games. Allen & Company determined that in many of these cases, if these analysts applied their stated valuation methodology to the operating income and cash flow measures
for Blizzard Entertainment as provided by Vivendi Games management, the resulting value for Blizzard Entertainment would fall within Allen & Company's estimated value range.

Other Vivendi Games Businesses. Allen & Company's valuation analyses for Sierra, Sierra Online and Vivendi Games
Mobile derived a range of values for each in which the high value represented the DCF value of continuing to operate the business as a going concern, assuming a terminal multiple based on applicable
trading multiples of comparable public companies, and the low value represented the present value of the estimated cost to shut down the business including additional operating losses which would be
incurred prior to shut-down occurring. Allen & Company used a discount rate of 12.5% in its DCF analyses to calculate the present value as of December 1, 2007 of the low
value cases for each business. Allen & Company used discount rates of 12.5% for Sierra, 40.0% for Sierra Online and 40.0% for Vivendi Games Mobile to calculate the present value as of
December 1, 2007 of the high value cases for each business. For the Sierra high value case, the terminal multiple was based upon calendar year 2007 revenue multiples implied by the enterprise
values for Atari, Majesco and SCI Entertainment. For the Sierra Online high value case, the terminal multiple was based upon calendar year 2007 revenue multiples implied by the enterprise values for
NCSoft and The9 Limited. For the Vivendi Games Mobile high value case, the terminal multiple was based upon calendar year 2007 revenue multiples implied by the enterprise values for BuonGiorno,
GameLoft and Glu Mobile. Allen & Company's DCF analyses for each of Sierra, Sierra Online and Vivendi Games Mobile assumed closing of the transaction on March 31, 2008 and a tax rate of
36.0%. Based on Allen & Company's DCF analyses of Sierra, Sierra Online and Vivendi Games Mobile, their aggregate value range was determined to be $(82) million to $491 million.

Combined Value Range for Vivendi Games. Combining the value ranges of Vivendi Games' other businesses with the value range
for Blizzard, Allen & Company determined that the net value of Vivendi Games ranged between a low valuation case of $8.1 billion and a high valuation case of $9.5 billion.
Allen & Company then deducted $148 million from both the low and high valuation cases, representing Allen & Company's estimate, made solely for purposes of its analyses, of the
amount payable by Vivendi Games' with respect to the Blizzard equity plan, net of the resulting tax benefit. (Under the terms of the Blizzard equity plan, the value of Blizzard, and the resulting
payments owed under the Blizzard equity plan, are determined pursuant to a methodology set forth in the Blizzard equity plan. Consequently, the estimate used by Allen & Company may not reflect
the actual payment obligations under the Blizzard equity plan.)

Based
upon the foregoing value ranges for Vivendi Games, Allen & Company was able to calculate an implied exchange ratio for Vivendi Games under both the low valuation case and
the high valuation case. These calculations yielded an implied exchange ratio of 362,266.79242 on the low end and 424,694.59760 on the high end. The exchange ratio as set forth in the business
combination agreement is 369,136.36364 which falls within the range of these cases.

Per Share Transaction Price of the Tender Offer

In addition to the methodologies described above in the section entitled "Per Share Transaction Price of the Share Purchase," which were employed by
Allen & Company in its evaluation of the per share transaction price of shares issued by Activision in the share purchase, Allen & Company analyzed and examined the premiums paid in
comparable self-tender offers over the market price prior to the announcement. More specifically, Allen & Company analyzed the premiums paid in 28 transactions since
January 1, 1999 involving domestic public companies that executed self-tender offers for shares for an amount exceeding $100 million. For this universe of transactions,
Allen & Company found that

74

the
tender price compared to the self-tendering companies' share prices prior to announcement of their self tender ranged from a discount of (8.0)% to a premium of 45.5%, with a median
premium of 7.2%. Allen & Company found that the $27.50 per share transaction price of the tender offer represented a premium to Activision's market price prior to the announcement which is
significantly greater than the median of the range of premiums paid in comparable self-tender offers.

Implications of The Business Combination Agreement Transactions as a Whole

In considering the implications of the transactions contemplated by the business combination agreement taken as a whole to both Activision and its stockholders,
Allen & Company performed the following additional analyses: (a) an accretion and dilution analysis; and (b) a determination of value to Activision's stockholders as a result of
the transactions using (w) an analysis of the premiums implied by this value range; (x) an analysis of the multiples implied by this value range as compared to trading multiples of
comparable public companies; (y) an analysis of the multiples implied by this value range as compared to multiples paid in comparable precedent transactions; and (z) an analysis of the
value range compared to a DCF analysis of Activision as a stand-alone entity.

Accretion/Dilution Analysis. Allen & Company found that the transaction would be accretive to the stockholders of
Activision on a calendar year 2008 basis pro forma as if the transaction occurred on January 1, 2008, and on a calendar year 2009 basis. Allen & Company also examined the impact on
accretion/dilution of no tender offer occurring, but a future buyback of $3.328 billion worth of shares at a 10-20% premium to the per share transaction price of the tender offer
being consummated. Allen & Company found that the transaction would be accretive regardless of whether the tender offer is consummated. Allen & Company performed its analysis based on
financial estimates developed by Activision for Vivendi Games as well as financial estimates provided by Vivendi Games management for its various businesses. Financial estimates for Activision were
provided by its management. Allen & Company's accretion/dilution analysis was not prepared in accordance with generally accepted accounting principles in the United States and did not reflect
any one-time restructuring charges, stock-based compensation or additional intangible amortization that may result from the proposed transaction. In performing its accretion/dilution
analysis, Allen & Company assumed a projected stand-alone cash balance for Activision of $1.35 billion as of an estimated closing date of March 31, 2008, an average
interest rate on cash earned of 4.5%, an average interest rate on debt of 7.5% and a marginal tax rate of 36.0%. Allen & Company's analysis factored in various liabilities assumed at Vivendi
Games. In addition, Allen & Company assumed an increase of shares outstanding for Activision in each of calendar years 2008 and 2009 to take into account share issuances resulting from future
stock-based compensation.

Using
financial estimates developed by Activision for Vivendi Games, in the event the tender offer is fully subscribed at a price of $27.50, the transaction would be $0.15 accretive to
pro forma calendar year 2008 EPS and $0.19 accretive to calendar year 2009 EPS. In the event no shares are tendered, the transaction would be $0.14 accretive to pro forma calendar year 2008 EPS and
$0.12 accretive to calendar year 2009 EPS. In the event no shares are tendered, but a future buy-back of $3.328 billion worth of shares is consummated at a 10% premium to the per
share transaction price of the tender offer, the transaction coupled with the buy-back would be $0.13 accretive to pro forma calendar year 2008 EPS and $0.16 accretive to calendar year
2009 EPS.

Using
financial estimates provided by Vivendi Games management for Vivendi Games, in the event the tender offer is fully subscribed at a repurchase price of $27.50, the transaction would
be $0.15 accretive to pro forma calendar year 2008 EPS and $0.30 accretive to calendar year 2009 EPS. In the event no shares are tendered, the transaction would be $0.14 accretive to pro forma
calendar year 2008 EPS and $0.22 accretive to calendar year 2009 EPS. In the event no shares are tendered, but a future buy-back of $3.328 billion worth of shares is consummated at
a 10% premium to the per share

75

transaction
price of the tender offer, the transaction coupled with the buy-back would be $0.13 accretive to pro forma calendar year 2008 EPS and $0.28 accretive to calendar year 2009 EPS.

Value to Activision's Stockholders. Allen & Company utilized the values established in its previous analyses to
establish a range pro forma enterprise values for Activision. The components to establish this enterprise value range consisted of: (a) the enterprise value of Activision as determined by the
public trading value of Activision's common stock as of the date of Allen & Company's opinion; (b) the value of Vivendi Games as determined by Allen & Company's estimated value
range for Vivendi Games; and (c) an estimate for the capitalized value of estimated synergies. This analysis resulted in a range of potential future enterprise values for the combined company.
Allen & Company analyzed the blended value to Activision's stockholders that would result assuming that all stockholders tender in the tender offer if the blended value was below $27.50 and
that no stockholders would tender if the blended value was above $27.50. Allen & Company's analysis indicated that the value to Activision's stockholders ranged from $25.81 to $27.85, with a
midpoint of $26.77.

Premiums Implied by the Range of Blended Value. Allen & Company compared the range of
value to Activision's stockholders of $25.81 to $27.85 to various measures relating to the price of Activision's common stock between the dates of November 1, 2007 and November 29, 2007.
These measures included: (a) the closing price; (b) the 10-day trailing average closing prices; (c) the 4-weeks prior closing prices; and (d) the
20-day trailing average closing prices.

Allen &
Company demonstrated that the premium represented by the low end of the range of value to Activision's stockholders of $25.81 ranged from 12% - 36% to the closing prices,
12% - 29% to the 10-day trailing average closing prices, 9% - 17% to the 4-weeks prior closing prices and 13% - 22% to the 20-day trailing average closing prices
during the time period between November 1, 2007 and November 29, 2007. As of the closing price on November 29, 2007, the premium represented by the $25.81 value was 17% to the
closing price, 26% to the 10-day trailing average closing price, 12% to the 4-weeks prior closing prices and 22% to the 20-day trailing average closing prices.

Allen &
Company demonstrated that the premium represented by the high end of the range of value to Activision's stockholders of $27.85 ranged from 21% - 47% to the closing prices,
21% - 39% to the 10-day trailing average closing prices, 18% - 27% to the 4-weeks prior closing prices and 22% - 32% to the 20-day trailing average closing prices
during the
time period between November 1, 2007 and November 29, 2007. As of the closing price on November 29, 2007, the premium represented by the $27.85 value was 27% to the closing price,
36% to the 10-day trailing average closing prices, 21% to the 4-weeks prior closing prices and 32% to the 20-day trailing average closing prices.

Allen &
Company demonstrated that the premium represented by the midpoint of the range of value to Activision's stockholders of $26.77 ranged from 16% - 41% to the closing prices,
16% - 34% to the 10-day trailing average closing prices, 13% - 22% to the 4-weeks prior closing prices and 17% - 27% to the 20-day trailing average closing prices
during the time period between November 1, 2007 and November 29, 2007. As of the closing price on November 29, 2007, the premium represented by the $26.77 value was 22% to the
closing price, 31% to the 10-day trailing average closing prices, 16% to the 4-weeks prior closing prices and 27% to the 20-day trailing average closing prices.

Analysis of the Multiples Implied by the Range of Blended Value as Compared to Trading Multiples of Comparable Public
Companies. Although Allen & Company believed that no companies were directly comparable to Activision, it nonetheless analyzed and examined current trading multiples
for companies which it considered similar to, or which operate within the same industry as, Activision. See the section entitled "Per Share Transaction Price of the Share
PurchaseComparable Public Company Multiples Analysis."

Allen &
Company calculated various valuation multiples, including: the ratio of share price to the estimated EPS and the ratio of enterprise value to the estimated EBITDA on a
projected calendar year

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basis
for 2007, 2008 and 2009 for each of the selected companies. Allen & Company determined that the range of blended value to Activision's stockholders of $25.81 to $27.85 and the implied
enterprise and equity value multiples derived therefrom were within or above the range of multiples of comparable publicly traded companies in both the interactive entertainment industry as well as in
the broader entertainment industry. EBITDA and EPS projections and estimates were derived from Wall Street analyst research.

Multiples Implied by Range of Value to Company's Stockholders

Low
$25.81

High
$27.85

Range of Multiples
from Comparable
Publicly-Traded Companies

EV / CY07 EBITDA

20.2x

22.1x

6.1x - 35.0x

EV / CY08 EBITDA

16.6x

18.2x

7.4x - 37.0x

EV / CY09 EBITDA

14.4x

15.8x

7.5x - 18.7x

Price / CY07 EPS

32.6x

35.1x

9.4x - 54.9x

Price / CY08 EPS

26.8x

28.9x

11.0x - 61.2x

Price / CY09 EPS

23.9x

25.8x

8.8x - 32.1x

Analysis of the Multiples Implied by the Range of Blended Value to Activision's Stockholders as Compared to Multiples Paid
in Comparable Precedent Transactions. Allen & Company reviewed selected precedent transactions that had announcement dates between 1998 and 2007 and had
publicly-disclosed information or industry analyst estimates from which purchase price multiplies could be derived. Finding that there were no transactions of comparable scale in the interactive
entertainment industry, Allen & Company examined the broader entertainment industry for acquired businesses having characteristics similar to Activision. See "Per Share Transaction Price of the
Share PurchaseComparable Public Company Multiples Analysis."

As
indicated by the chart below, Allen & Company determined that the range of blended value to Activision's stockholders of $25.81 to $27.85 and the implied enterprise value and
equity value
multiples for Activision derived therefrom were above or within the range of multiples paid in comparable transactions in the broader entertainment industry.

Multiples Implied by Range of Value to Activision's Stockholders

Low
$25.81

High
$27.85

Range of Multiples from
Comparable Transactions in
Broader Entertainment Industry

Enterprise Value / LTM EBITDA

32.2x

35.2x

16.1x - 29.3x

Enterprise Value / Forward EBITDA

20.2x

22.1x

13.2x - 19.7x

Equity Value / LTM Net Income

48.1x

52.1x

30.8x - 49.7x

Equity Value / Forward Net Income

32.6x

35.1x

28.0x - 35.4x

DCF Analysis of Activision as a Stand-Alone Entity. Allen & Company's DCF approach was
based upon certain financial projections and estimates for Activision derived from Wall Street analyst reports. Allen & Company used a DCF analysis to identify a range of present values for
Activision's common stock based upon terminal forward P/E multiples ranging from 21x - 25x and discount rates ranging from 12% - 13%. Allen & Company determined that the range of blended value
to Activision's stockholders of $25.81 - $27.85 exceeded the range of values indicated by its DCF analysis.

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General Matters Relating to Allen & Company Engagement

Allen & Company's opinion and presentation to the Activision board of directors was one of many factors that the board of directors took into account in
making its decision. Consequently, the analyses described above should not be viewed as determinative of the opinion of the board in determining the fairness, from a financial point of view, to
Activision and its stockholders of the per share transaction price of the share purchase, the exchange ratio of the merger and the per share transaction price of the tender offer, taking into account
the transactions contemplated by the business combination agreement as a whole.

Pursuant
to an engagement letter dated December 1, 2007, the Activision board of directors confirmed the prior engagement of Allen & Company to act as its financial advisor
in connection with reviewing and evaluating (a) Activision's financial condition and historical and projected financial results, (b) Activision's current operations and business
prospects, and (c) the current condition of the industry, as well as any prevailing trends, and Activision's competitive position therein, and, among other things, advising Activision on the
transactions contemplated by the transaction. In connection with evaluating such transaction, Allen & Company (a) advised Activision with respect to its analysis of the proposed
transaction, (b) advised Activision as to its view of any appropriate and alternative courses of action relating to the proposed transaction, (c) assisted Activision in structuring the
proposed transaction, and rendering its opinion to the Activision board of directors. Allen & Company was selected by the board based on Allen & Company's qualifications and reputation.
Allen & Company, as part of its investment banking business, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, private
placements and related financings, bankruptcy reorganizations and similar recapitalizations, negotiated underwritings, secondary distributions of listed and unlisted securities, and valuations for
corporate and other purposes. Except as described in the opinion, Allen & Company does not have and has not had any material relationships involving the payment or receipt of compensation
between Allen & Company and Activision, Vivendi, and to Allen & Company's knowledge, any of their respective affiliates during the last two years. Allen & Company or its
affiliates, in the ordinary course of their business as a broker-dealer and market maker, may have long or short positions, either on a discretionary or nondiscretionary basis, for their own accounts
or for those of their clients, in the debt and equity securities (or related derivative securities) of Activision, Vivendi or any of their respective affiliates.

Pursuant
to the terms of the engagement letter, Allen & Company was paid a fee upon delivery of the opinion to the Activision board of directors, with such fee creditable against
any "transaction fee" subsequently paid to Allen & Company. Contingent upon the completion of the transaction, Activision agreed to pay Allen & Company a further cash fee, which we refer
to herein as the transaction fee. Activision also agreed to reimburse Allen & Company's expenses and indemnify Allen & Company against certain liabilities arising out of such engagement.

Interests of Activision's Executive Officers and Directors in the Transaction

When you consider our board of directors' recommendation to vote in favor of the proposals presented in this proxy statement, you should be aware that some of our
executive officers and directors have interests in the transaction that may be different from, or in addition to, the interests of other Activision stockholders.

Our
current board of directors consists of eight members. Of these eight, Messrs. Kotick, Kelly, Corti, Morgado and Sarnoff will continue as directors of Activision Blizzard after
the closing date. Additionally, Activision Blizzard has agreed to provide Activision's current directors with customary indemnification and insurance coverage.

We
also expect that several members of our existing management team will continue to serve in executive positions with the combined company.

78

Certain
of our existing executives have entered into amended employment arrangements with Activision. On December 1, 2007, Messrs. Kotick and Kelly entered into amended and
restated employment agreements with Activision. Mr. Kotick will serve as President and Chief Executive Officer of the combined company and Mr. Kelly will serve as
Co-Chairman. Additionally, on the closing date, Mr. Kotick will receive a grant of 1,250,000 performance shares, which will vest in 20% increments on each of the first, second,
third and fourth anniversaries of the closing date, with another 20% vesting on December 31, 2012, the expiration date of Mr. Kotick's employment agreement, subject to the attainment of
certain performance thresholds. Messrs. Kotick and Kelly have also agreed to the waiver of certain change in control benefits to which they may have been entitled as a result of the
transaction. In addition, they have entered into replacement bonus agreements pursuant to which they will each receive a grant of 363,637 restricted stock units, or RSUs, and a cash bonus of
$5,000,000 on the date of the signing of the replacement bonus agreements and on the closing date (so long as the closing occurs on or before June 30, 2009).

Additionally,
on December 1, 2007, Michael J. Griffith, currently the President and Chief Executive Officer of Activision Publishing, entered into an amendment to his
existing employment agreement to provide additional incentives for Mr. Griffith to remain employed by Activision Publishing following the completion of the transaction. The amendment to
Mr. Griffith's employment agreement becomes effective upon completion of the transaction and provides for, among other things, a modified vesting schedule for certain equity awards previously
granted to Mr. Griffith. Additionally, the amendment provides that, on the closing date, Mr. Griffith will receive 50,000 stock options and 50,000 RSUs.

See
the section of this proxy statement entitled "Board and Management of Activision Blizzard" for additional information.

The
Activision board of directors was aware of these interests and considered them, among other things, in making its recommendation that Activision stockholders vote for the approval of
the share issuance proposal, the charter amendment proposal and the bylaw amendment proposal.

Rights Plan Amendment

On April 18, 2000, Activision's board of directors approved a shareholders rights plan, pursuant to which each common stockholder at the close of business
on April 19, 2000 received a dividend of one right for each share of common stock held. The rights were only exercisable if a person or group acquired 15% or more of the common stock of
Activision, or announced or commenced a tender or exchange offer which would result in the bidder's beneficial ownership of 15% or more of our common stock. On the record date, there were no shares of
the Series A Junior Preferred Stock outstanding.

In
accordance with the terms of the business combination agreement, Activision has amended the rights plan so that (a) neither Vivendi nor any of its affiliates are considered an
"Acquiring Person" or a "Beneficial Owner of Common Stock" for purposes of the plan and (b) no "Distribution Date" or "Triggering Event" (as such terms are defined in the rights plan) will
occur as a result of the execution, delivery, or performance of the business combination agreement or the completion of the transaction. As a result of such amendments, the rights will not separate
from the shares and will not become exercisable as a result of the execution, delivery or performance of the business combination agreement or the completion of the transaction. In addition, the
rights plan amendment provides that the rights plan will terminate upon the completion of the transaction and all rights existing under the rights plan will be extinguished.

No Appraisal Rights

Under Section 262 of the DGCL, Activision stockholders are not entitled to appraisal rights in connection with the transaction.

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Material United States Federal Income Tax Consequences

The following is a summary of the anticipated material United States federal income tax consequences to Activision stockholders of the adoption of the proposed
amendments to Activision's certificate of incorporation and the consummation of the transaction. This summary is based upon existing United States federal income tax law, which is subject to differing
interpretations or change, possibly with retroactive effect. This summary does not discuss all aspects of United States federal income taxation which may be important to particular Activision
stockholders in light of their individual investment circumstances, such as stockholders subject to special tax rules (e.g., financial institutions,
insurance companies, broker-dealers, partnerships and their partners, tax-exempt organizations (including private foundations), and non-United States stockholders) or to
persons that will hold Activision stock as part of a straddle, hedge, conversion, constructive sale, or other integrated security transaction for United States federal income tax purposes, all of whom
may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not discuss any tax considerations related to state, local or non-United
States tax laws. Each Activision stockholder is urged to consult its tax advisor regarding the United States federal, state, local, and non-United States income tax considerations of the
adoption of the proposed amendments and the consummation of the proposed transaction.

Activision
stockholders will not recognize any gain or loss for United States Federal income tax purposes as a result of (a) an adoption of the proposed amendments to Activision's
certificate of incorporation or (b) the consummation of the transaction.

U.S. Federal or State and Foreign Regulatory Matters

The transaction is subject to review by the U.S. Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice and state antitrust
authorities pursuant to applicable federal and state antitrust laws. Under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which we refer to in this
proxy statement as the "HSR Act," the transaction cannot be completed until (a) the companies have filed the required notification and report forms and have provided certain information and
materials to the U.S. Federal Trade Commission and to the Antitrust Division of the U.S. Department of Justice, and (b) the applicable waiting period has expired or been terminated. Activision
and Vivendi have made these filings and the waiting period under the HSR Act has expired.

Both
Activision and Vivendi conduct business in member states of the European Union. Council Regulation (EC) No. 139/2004, as amended, and accompanying regulations require
notification to, and approval by, the European Commission of specific transactions, including the transaction, involving parties with worldwide sales and individual European Union sales exceeding
specified thresholds before these transactions can be implemented. Activision and Vivendi filed the required documentation with the European Commission regarding the transaction
on ,
2008.

Accounting Treatment

The transaction will be accounted for as a reverse acquisition under the purchase method of accounting under U.S. GAAP. For this purpose, Vivendi Games
will be deemed to be the accounting acquiror and Activision will be deemed to be the accounting acquiree. Accordingly, Activision Blizzard will account for the transaction as a purchase business
combination, using Vivendi Games historical financial information and accounting policies and applying fair value estimates to the acquired assets, liabilities and commitments of Activision as of the
date of the transaction.

80

THE BUSINESS COMBINATION AGREEMENT

The following summary describes the material provisions of the business combination agreement, a copy of which is attached as
Annex A to this proxy statement and is incorporated by reference into this proxy statement. The rights and obligations of the parties to the business combination agreement are governed by the
express terms and conditions of the business combination agreement and not by this summary. This summary may not contain all of the information about the business combination agreement that is of
importance to you and is qualified in its entirety by reference to the complete text of the business combination agreement. We encourage you to read the business combination agreement carefully and in
its entirety for a more complete understanding of the business combination agreement.

Structure of the Transaction and Tender Offer

Pursuant to the business combination agreement, Merger Sub, a newly formed, wholly-owned subsidiary of Activision, will merge with and into Vivendi Games, as
described below in greater detail in the section entitled "The Merger." Concurrently, Vivendi will acquire shares of capital stock of Activision as more fully described below in the section entitled
"The Share Purchase." The merger and the share purchase are referred to in this proxy statement, collectively, as the "transaction." As a result of the consummation of the transaction, Activision will
be an indirect majority-owned subsidiary of Vivendi, and Vivendi Games will be a direct wholly-owned subsidiary of Activision.

Following
the closing of the transaction, the combined company will launch a tender offer to purchase up to 146.5 million shares of its common stock at a price of $27.50 per
share. The terms of the tender offer are more fully described below in the section entitled "The Tender Offer." If the tender offer is fully subscribed, Vivendi and its subsidiaries are expected to
own approximately 68.0% of the issued and outstanding shares of the combined company's common stock on a fully diluted basis.

The Merger

Subject to the terms and conditions of the business combination agreement and in accordance with Delaware law, Merger Sub, a newly formed, wholly-owned subsidiary
of Activision, will merge with and into Vivendi Games, a direct wholly-owned subsidiary of VGAC and indirect wholly-owned subsidiary of Vivendi, and Vivendi Games will survive the merger and continue
as a wholly-owned subsidiary of Activision.

Closing and Effective Time of the Merger

The merger will become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware or at such later time as may be
agreed upon by Activision, Merger Sub, Vivendi, VGAC and Vivendi Games and as specified in the certificate of merger. The certificate of merger will be filed as soon as practicable on the closing
date, which is expected to occur on the third (3rd) business day following the satisfaction or waiver (to the extent permitted under applicable law and the terms of the business
combination agreement) of all conditions to the obligations of the parties described under the section entitled "Conditions to the Transaction," or at such other place or time or on such other date as
Activision, Merger Sub, Vivendi, VGAC and Vivendi Games may collectively agree in writing.

Consideration to be Received in the Merger

Activision Common Stock



Activision Common Stock. Upon completion of the merger, each outstanding share of Vivendi Games common stock
(other than treasury shares owned by Vivendi Games immediately prior to the completion of the merger, which will be cancelled and extinguished) will be converted into

81

the
right to receive 369,136.36364 newly issued shares of Activision common stock, which number is based upon a valuation of Vivendi Games at $8.121 billion, a per share price for Activision
common stock of $27.50 and the number of shares of Vivendi Games outstanding as of November 26, 2007. Based on the exchange ratio, VGAC, as the sole stockholder of Vivendi Games, will receive a
total of approximately 295.3 million newly issued shares of Activision common stock in connection with the merger.



Fractional Shares. Activision will not issue any fractional shares of Activision common stock in connection with
the merger. Instead, if VGAC would otherwise be entitled to receive a fraction of a share of Activision common stock, it will receive cash, without interest, in an amount equal to the fraction
multiplied by $27.50.

Adjustments to Prevent Dilution

The per share price of $27.50 will be appropriately and equitably adjusted to reflect fully the effect of any stock split, reverse stock split, reclassification,
recapitalization, consolidation, exchange or similar change with respect to Activision common stock or any extraordinary dividend or distribution with respect to Activision common stock, in each case
occurring (or having a record date) after the date of the business combination agreement and prior to the effective time of the merger.

Procedures for Exchange of Certificates

At the completion of the merger and upon proper surrender of any of its Vivendi Games stock certificates to Activision or its designee, VGAC will receive the
applicable merger consideration as described above under "Consideration to be Received in the Merger," including (a) cash for any fractional shares of Activision common stock issuable to VGAC,
and (b) any dividends or other distributions declared with respect to Activision common stock between the date of the business combination agreement and the effective time of the merger.

If
any Vivendi Games stock certificate is lost, stolen or destroyed, VGAC must deliver an affidavit of that fact prior to receiving any merger consideration and, if required by
Activision, may also have to provide an appropriate indemnity prior to receiving any merger consideration.

After
the effective time of the merger, Vivendi Games' transfer books will be closed and there will be no further transfers on Vivendi Games' transfer books of shares of Vivendi Games
common stock that were outstanding immediately prior to the effective time of the merger. If, after the effective time of the merger, Vivendi Games stock certificates are presented to Activision or
Vivendi Games (as the surviving corporation of the merger), they will be cancelled and exchanged for the applicable merger consideration as described above.

Treatment of Equity Grants under the Blizzard Equity Plan

Certain Blizzard employees participate in the Blizzard equity plan, pursuant to which they have been granted options to acquire shares of Blizzard common stock
and/or shares of restricted Blizzard common stock. Under the terms of the Blizzard equity plan, at the effective time of the transaction, all outstanding and unexercised options to acquire shares of
Blizzard common stock as well as all outstanding shares of restricted Blizzard common stock will be cancelled and converted into the right to receive an amount in cash, each in accordance with the
terms of the Blizzard equity plan. At the effective time, by virtue of the merger and pursuant to the terms of the Blizzard equity plan:



each
outstanding and unexercised option to acquire shares of Blizzard common stock that was vested prior to the effective time of the merger will be cancelled and
automatically converted into the right to receive from Vivendi Games (as the surviving corporation of the merger) an amount in cash equal to the product of (a) the aggregate number of shares of
Blizzard common

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stock
that were issuable upon exercise of such stock option immediately prior to the effective time of the merger and (b) the excess, if any, of the per share value of each share of Blizzard
common stock as determined in accordance with the Blizzard equity plan over the per share exercise price of such stock option;



each
outstanding share of restricted Blizzard common stock (or shares of restricted Blizzard common stock underlying restricted stock units) that was vested prior to the
effective time of the merger will be cancelled and automatically converted into the right to receive from Vivendi Games (as the surviving corporation of the merger) an amount in cash equal to the per
share value of each share of Blizzard common stock as determined in accordance with the Blizzard equity plan;



each
outstanding and unexercised option to acquire shares of Blizzard common stock, the vesting of which will accelerate due to the merger, will be cancelled and
automatically converted into the right to receive from Vivendi Games (as the surviving corporation of the merger), eighteen (18) months after the effective time of the merger and in accordance
with the terms of the Blizzard equity plan, including continued employment through the payment date, an amount in cash equal to the product of (a) the aggregate number of shares of Blizzard
common stock that were issuable upon exercise of such stock option immediately prior to the effective time of the merger and (b) the excess, if any, of the per share value of each share of
Blizzard common stock as determined in accordance with the Blizzard equity plan over the per share exercise price of such stock option; and



each
outstanding share of restricted Blizzard common stock (or shares of restricted Blizzard common stock underlying restricted stock units), the vesting of which will
accelerate due to the merger, will be cancelled and automatically converted into the right to receive from Vivendi Games (as the surviving corporation of the merger), eighteen (18) months after
the effective time of the merger and in accordance with the terms of the Blizzard equity plan, including continued employment through the payment date, an amount in cash equal to the per share value
of each share of Blizzard common stock as determined in accordance with the Blizzard equity plan.

Activision
will, or will cause Vivendi Games (as the surviving corporation of the merger) to, pay to holders of options to acquire shares of Blizzard common stock and shares of
restricted Blizzard common stock outstanding as of the time prior to the effective time of the merger, including those who continue to be employed by the combined company, the applicable consideration
in accordance with terms and conditions of the Blizzard equity plan as in effect immediately prior to the effective time of the merger. Such payment will be reduced by any income or employment tax
withholding required under the Code or any provision of state, local or foreign tax law. The estimated aggregate cash payments to be made by Activision Blizzard to Blizzard equity plan participants
will be $113.0 million at the closing of the transaction and an additional $89.2 million eighteen months after such closing, in each case assuming the Blizzard equity plan participants
remain employed at Blizzard through the applicable date.

The Share Purchase

Concurrently with the merger and subject to the terms and conditions of the business combination agreement, Vivendi will purchase from Activision
62.9 million newly issued shares of Activision common stock for an aggregate purchase price of $1.731 billion in cash.

Closing of the Share Purchase

The share purchase will close simultaneously with the merger on the third (3rd) business day following the satisfaction or waiver (to the extent
permitted under applicable law and the terms of the

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business
combination agreement) of all conditions to the obligations of the parties described under the section entitled "Conditions to the Transaction," or at such other place or time or on such
other date as Activision, Merger Sub, Vivendi, VGAC and Vivendi Games may collectively agree in writing.

The
closing date of both the share purchase and the merger is referred to in this proxy statement as "closing date."

Ownership of Activision Common Stock Following the Transaction

Activision expects to issue an aggregate of approximately 358.2 million new shares of Activision common stock in connection with the transaction,
consisting of approximately 295.3 million new shares of Activision common stock issued to VGAC in connection with the merger and approximately 62.9 million new shares of Activision
common stock issued to Vivendi in connection with the share purchase. The newly issued shares of Activision common stock are expected to represent approximately 52.2% of the total number of shares of
Activision common stock outstanding immediately following consummation of the transaction.

Upon
completion of the transaction, Activision stockholders will continue to own their existing shares of Activision common stock. Accordingly, Activision stockholders will hold the same
number of shares of Activision common stock that they held immediately prior to the transaction. However, since Activision will be issuing new shares of Activision common stock to VGAC in connection
with the merger and to Vivendi in connection with the share purchase, each outstanding share of Activision common stock immediately prior to the merger and the share purchase will represent a smaller
percentage of the total number of shares of Activision common stock outstanding following consummation of the transaction. It is expected that Activision's former stockholders will hold approximately
47.8% of the total number of shares of Activision common stock outstanding upon completion of the transaction and prior to completion of the post-closing tender offer described below. If the tender
offer described below is fully subscribed then the Activision's former stockholders will hold approximately 32.0% of the total number of shares outstanding.

As
a result of the consummation transaction, Activision will become an indirect majority-owned subsidiary of Vivendi, and Vivendi Games will become a direct wholly-owned subsidiary of
Activision.

The Tender Offer

The tender offer described in this proxy statement has not yet commenced. The description contained herein is neither an offer to purchase
nor a solicitation of an offer to sell shares of our common stock. The solicitation and the offer to buy shares of our common stock will only be made pursuant to an offer to purchase, forms of letters
of transmittal and other documents relating to the tender offer that we intend to file with the SEC. Once filed, our stockholders should read the Tender Offer Statement and the other documents
relating to the tender offer carefully and in their entirety prior to making any decisions with respect to the offer because they will contain important information about the tender offer, including
the terms and conditions of the offer. Once filed, our stockholders will be able to obtain the Tender Offer Statement and the other documents relating to the tender offer free of charge at the SEC's
website at http://www.sec.gov, or from the information agent named in the tender offer materials.

Commencement of the Tender Offer

Within five (5) business days after the closing date and subject to the terms and conditions of the business combination agreement and the tender offer
statement, the combined company has agreed to launch a cash self tender offer to purchase up to 146.5 million shares of its common stock at a purchase price of $27.50 per share, net to each
seller in cash. All shares of Activision Blizzard common stock purchased by Activision Blizzard pursuant to the tender offer will be retired.

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Proration

If, at the expiration date of the tender offer, more than 146.5 million shares of Activision Blizzard common stock have been validly tendered, Activision
Blizzard will purchase from each tendering stockholder a prorated number of shares of Activision Blizzard common stock. Proration for each stockholder tendering shares will be based on the ratio of
(a) the number of shares of Activision Blizzard common stock that have been properly tendered and not withdrawn by a particular stockholder to (b) 146.5 million, divided by the
total number of shares of Activision Blizzard common stock properly tendered and not withdrawn by all stockholders.

Funding of the Tender Offer

Assuming the maximum number of shares (146.5 million shares) is tendered in the tender offer, the aggregate purchase price for the shares of Activision
Blizzard common stock tendered in the tender offer will be approximately $4.028 billion.

Activision
and Vivendi have agreed that the purchase of the shares tendered in the tender offer will be funded as follows:



the
first $2.928 billion of the aggregate consideration will be funded by Activision Blizzard with proceeds from the share purchase described above, available cash on
hand and, if necessary, borrowings made under one or more new credit facilities;



if
the aggregate consideration is more than $2.928 billion, Vivendi has agreed to purchase from Activision Blizzard, at a purchase price of $27.50 per share,
additional newly issued shares of Activision Blizzard common stock in an amount equal to the lesser of (a) $700 million and (b) the excess of the aggregate consideration over
$2.928 billion, which amount will be used by Activision Blizzard to fund the amount of the aggregate consideration that is in excess of $2.928 billion; and



if
the aggregate consideration exceeds $3.628 billion, Activision Blizzard will fund the additional amount of the aggregate consideration that is in excess of
$3.628 billion (up to the maximum aggregate consideration of $4.028 billion) through borrowings made under one or more new credit facilities issued by Vivendi or third party lenders.

Tender Offer Conditions

Pursuant to the business combination agreement, Activision Blizzard will not be required to accept for payment, or (subject to the rules and regulations of the
SEC) to pay for any shares of Activision Blizzard common stock tendered pursuant to the tender offer, and may delay the acceptance for payment of any shares of Activision Blizzard common stock
tendered pursuant to the tender offer, and amend or terminate the tender offer, if at any time after the consummation of the transaction on the closing date and prior to the expiration of the tender
offer, any of the following conditions exists and is continuing:



any
governmental entity has issued or entered any order or enacted, issued, promulgated or enforced any law, which restrains, enjoins or prohibits consummation of the tender
offer or makes the consummation of the tender offer illegal; or



Activision
Blizzard determines that the consummation of the tender offer may cause (a) the number of record holders to be reduced to less than 300 persons, or
(b) the shares of Activision Blizzard common stock to be delisted from NASDAQ or to become eligible for deregistration under the Exchange Act.

Under
the business combination agreement, Activision Blizzard may not waive any of the aforementioned conditions to the tender offer or make any change in the terms of or conditions to
the

85

tender
offer without Vivendi's prior consent, which will not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Activision Blizzard has the right to extend the tender
offer beyond the initial expiration date (which will be at least twenty (20) business days following the date the tender offer is commenced) in the following circumstances:



from
time to time if, at the initial or extended expiration date of the tender offer, any of the conditions to the tender offer has not been satisfied or waived;



for
any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the tender offer or any period required by
applicable law; or



upon
the mutual agreement of Activision Blizzard and Vivendi, provided that the extended expiration date will not be more than twenty (20) business days past the
initial expiration date.

Tender Prohibitions

Under the terms of the business combination agreement, neither Vivendi nor any of Vivendi's subsidiaries will tender any shares of Activision Blizzard common
stock to Activision Blizzard pursuant to the tender offer. In addition, under the terms of the voting and lock-up agreements described below under "Certain Agreements Related to the
TransactionVoting and Lock-Up Agreements," Messrs. Robert A. Kotick, Activision's Chairman and Chief Executive Officer, and Brian G. Kelly, Activision's
Co-Chairman, have agreed not to tender more than one third (1/3) of their shares of Activision Blizzard common stock and other equity securities of Activision Blizzard.

Ownership of Activision Blizzard Common Stock Following the Tender Offer

If the tender offer is fully subscribed, Vivendi and its subsidiaries are expected to own approximately 383.7 million shares of Activision Blizzard's
common stock, representing approximately 68.0% of the issued and outstanding shares of Activision Blizzard's common stock on a fully diluted basis.

Tender Offer Tax Considerations

Any material United States federal income tax consequences of the tender offer will be described in the Tender Offer Statement or other documents related to the
tender offer.

Conditions to the Transaction

Conditions to Each Parties' Obligation to Effect the Transaction

The obligations of each of the parties to effect the transaction are subject to the satisfaction of each of the following mutual conditions, none of which (except
for the new credit facilities condition) may be waived by the parties:



the
approval by Activision's stockholders of the principal terms of the business combination agreement and the transaction, including, but not limited to, the issuance of
shares of Activision common stock in the transaction, must have been obtained;



(a)
the expiration of the waiting period (and any extensions thereof) required under the HSR Act (which waiting period expired on January 16, 2008), (b) the
termination of any investigations relating to the transaction that may have been opened by either the Department of Justice or the FTC, and (c) the obtainment or taking, as the case may be, of
all other material consents, approvals and actions of, filings with and notices to any governmental authority of the European Union relating to the transaction;

86



the
obtainment of all other clearances, consents, approvals, orders and authorizations that are necessary for the closing of the transaction, except for such clearances,
consents, approval, order or authorizations that would not reasonably be expected to have a material adverse effect on the business and operations of Activision and Vivendi Games (as the surviving
corporation in the merger), taken as a whole, and the benefits that are expected to derive from the transaction;



the
absence of any law enacted, entered, enforced or deemed applicable to the transaction by any governmental entity that makes the consummation of the transaction illegal
in the U.S. or any foreign jurisdiction in which any of the parties has substantial business and operations;



the
absence of any order by any governmental entity in the United States or any foreign jurisdiction in which Activision or Vivendi Games has substantial business and
operations, that makes the consummation of the transaction illegal in the United States or such foreign jurisdiction; and



the
obtainment by Activision of one or more new credit facilities either from third party lenders or from Vivendi.

Conditions to Vivendi's, VGAC's and Vivendi Games' Obligation to Effect the Transaction

The respective obligations of Vivendi, VGAC and Vivendi Games to effect the transaction are subject to the satisfaction of several additional conditions (any of
which may be waived in writing by Vivendi), including:



the
representations and warranties of Activision and Merger Sub must be true and correct (without giving any effect to any qualification as to materiality or material
adverse effect with respect to Vivendi Games contained in any specific representation or warranty) as of the closing date as if made on and as of the closing date, except:



for
changes contemplated or permitted by the business combination agreement;



to
the extent the representations and warranties address matters only as of a particular date, they must be true and correct only as of that date; and



where
any failures of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on Activision, as described below;



Activision
and Merger Sub must have complied, in all material respects, with all of the agreements, obligations, covenants and conditions required to be performed or to be
complied with by each of them under the business combination agreement at or prior to the closing date;



the
shares of Activision common stock which are to be issued in connection with the transaction (and, if applicable, in connection with the tender offer) must have been
approved for listing on NASDAQ, subject to official notice of issuance;



there
must be no pending litigation, commenced by any Activision stockholder after the date of the business combination agreement, against Activision or any of Activision's
directors before any governmental entity relating to (a) the business combination agreement, (b) any ancillary document thereto, or (c) the transactions contemplated by the
business combination agreement or the ancillary documents thereto that would render it impossible or unlawful to consummate the transactions; and



Activision
must have delivered to Vivendi executed copies of each of the ancillary documents to the business combination agreement to which Activision is a party.

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Conditions to Activision's and Merger Sub's Obligation to Effect the Transaction

The respective obligations of Activision and Merger Sub to effect the transaction are subject to the satisfaction of several additional conditions (any of which
may be waived in writing by Activision), including:



the
representations and warranties of Vivendi, VGAC and Vivendi Games must be true and correct (without giving any effect to any qualification as to materiality or material
adverse effect with respect to Activision contained in any specific representation or warranty) as of the closing date as if made on and as of the closing date, except:



for
changes contemplated or permitted by the business combination agreement;



to
the extent the representations and warranties address matters only as of a particular date, they must be true and correct only as of that date; and



where
any failures of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on Vivendi Games, as described below;



Vivendi,
VGAC and Vivendi Games must have complied, in all material respects, with all of the agreements, obligations, covenants and conditions required to be performed or
to be complied with by each of them under the business combination agreement at or prior to the closing date;



there
must be no pending litigation, commenced by any stockholder of Vivendi or Vivendi Games after the date of the business combination agreement, against Vivendi, VGAC or
any of its directors before any governmental entity relating to (a) the business combination agreement, (b) any ancillary document thereto, or (c) the transactions contemplated by
the business combination agreement or the ancillary documents thereto that would render it impossible or unlawful to consummate the transactions;



immediately
prior to the closing of the transaction, Vivendi, VGAC and Vivendi Games must have taken all necessary actions to provide that (a) all intercompany
arrangements, other than licenses entered into in the ordinary course of business, between Vivendi and VGAC, on the one hand, and Vivendi Games and its subsidiaries, on the other hand, have been
terminated, and (b) all monies owed pursuant to such intercompany arrangements have been paid in full; and



Vivendi
must have delivered to Activision executed copies of each of the ancillary documents to the business combination agreement to which either Vivendi, VGAC or Vivendi
Games is a party.

Definition of Material Adverse Effect

Under the terms of the business combination agreement, a material adverse effect on either Activision or Vivendi Games means any fact, event or circumstance which
is materially adverse to (a) the business,
properties, assets, condition (financial or otherwise) or results of operations of Activision and Activision's subsidiaries, taken as a whole, or Vivendi Games and Vivendi Games' subsidiaries, taken
as a whole, as the case may be, or (b) the ability of Activision or Merger Sub, or Vivendi, VGAC or Vivendi Games, as the case may be, to perform its respective obligations under the business
combination agreement or to consummate the transaction.

However,
none of the following will be deemed to constitute a material adverse effect with respect to Activision or Vivendi Games, as the case may be:



any
changes resulting from or arising out of general market, economic or political conditions (including any changes arising out of acts of terrorism or war, weather
conditions or other force majeure events), provided that such changes do not have a substantially disproportionate impact

88

on
Activision and Activision's subsidiaries, taken as a whole, or Vivendi Games and Vivendi Games' subsidiaries, taken as a whole, as the case may be;



any
changes resulting from or arising out of general market, economic or political conditions in the industries in which Activision or Vivendi Games or any of their
subsidiaries conduct business (including any changes arising out of acts of terrorism, or war, weather conditions or other force majeure events), provided that such changes do not have a substantially
disproportionate impact on Activision and Activision's subsidiaries, taken as a whole, or Vivendi Games and Vivendi Games' subsidiaries, taken as a whole, as the case may be; and



any
changes resulting from or arising out of actions taken pursuant to (and required by) the business combination agreement or at the request of Activision or of Vivendi or
Vivendi Games, as the case may be, or the failure to take any actions due to restrictions set forth in the business combination agreement.

In
addition, with respect to Activision, none of the following will be deemed to constitute a material adverse effect:



any
changes in the price or trading volume of Activision common stock, in and of itself, provided that such exclusion will not apply to any underlying fact, event or
circumstance that may have caused or contributed to such change in market price or trading volume; and



any
failure by Activision to meet published revenue or earnings projections, in and of itself, provided that such exclusion will not apply to any underlying fact, event or
circumstance that may have caused or contributed to such failure to meet such published revenue or earnings projections.

In
addition, with respect to Vivendi Games, the following will not be deemed to constitute a material adverse effect:



any
failure by Vivendi or Vivendi Games to meet any revenue or EBITA (earnings before interest, taxes and amortization) projections that are published by Vivendi with
respect to Vivendi Games and its subsidiaries, in and of itself, provided that such exclusion will not apply to any underlying fact, event or circumstance that may have caused or contributed to such
failure to meet such published revenue or EBITA projections.

Restrictions on Solicitation of Acquisition Proposals

Restrictions on Solicitation of Acquisition Proposals of Activision

Under the terms of the business combination agreement, Activision has agreed that it will not, and will not authorize or permit any of its subsidiaries or their
respective officers, directors, employees, agents and representatives (including any investment banker, attorney or accountant retained by Activision or any of its subsidiaries) to, directly or
indirectly:

enter
into, continue or otherwise participate in any discussions or negotiations regarding, or furnish information to any person regarding any Activision acquisition
proposal; or



allow
Activision or any of its subsidiaries to execute, or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar contract related to any Activision acquisition proposal.

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In
addition, Activision has agreed to, and to cause each of its subsidiaries to, (a) immediately cease and cause to be terminated all existing discussions or negotiations with any
person conducted prior to the date of the business combination agreement with respect to any Activision acquisition proposal, and (b) request the prompt return or destruction of all
confidential information previously furnished.

Notwithstanding
the foregoing restrictions, at any time prior to obtaining the Activision stockholder approval, Activision may, in response to a bona fide written acquisition proposal
that was made after the date of the business combination agreement and which Activision's board of directors determines in good faith (after consultation with outside counsel and a financial advisor
of nationally recognized reputation) constitutes, or is reasonably likely to lead to, an "Activision superior proposal" (as described below):



furnish
any information to the person making such Activision acquisition proposal (and that person's representatives) pursuant to a customary confidentiality agreement,
provided that all such information has either previously been provided to Vivendi or is provided to Vivendi prior to or substantially concurrent with the time it is provided to such person; and



enter
into, continue or otherwise participate in any discussions or negotiations regarding such Activision acquisition proposal with the proposing person (and that person's
representatives).

Activision
has agreed to advise Vivendi, orally and in writing, of any Activision acquisition proposal, including the material terms and conditions of such Activision acquisition
proposal and the identity of the proposing person. Activision will provide such information to Vivendi as promptly as practicable, and in any event within two (2) business days following
receipt of any Activision acquisition proposal, and will keep Vivendi reasonably informed in all material respects of the status and details of any Activision acquisition proposal (including changes
to the material terms thereof).

As
used in this proxy statement, the term "Activision acquisition proposal" means any inquiry, proposal or offer relating to (a) the acquisition by any person of, or (b) a
merger, consolidation, business combination, reorganization, share exchange, recapitalization, liquidation, dissolution or similar transaction involving Activision or any of its subsidiaries, which
would result in any person acquiring:



20%
or more of the aggregate outstanding voting securities of Activision;



20%
or more of the outstanding shares of capital stock of Activision;



20%
or more of the fair market value, immediately prior to such transaction, of the assets (including capital stock of Activision's subsidiaries) of Activision and its
subsidiaries, taken as a whole; or



any
combination of the foregoing.

As
used in this proxy statement, the term "Activision superior proposal" means a bona fide written Activision acquisition proposal (with all of the provisions in the definition of the
term Activision acquisition proposal given above adjusted to increase the percentages referenced therein to fifty percent (50%)), which Activision's board of directors determines in good faith (after
consultation with its financial advisors) to be more favorable to the stockholders of Activision as compared to the transaction and the tender offer as contemplated by the business combination
agreement (including any revisions to the business combination agreement made or proposed in writing by Vivendi) and any alternative transaction proposed in writing by Vivendi in accordance with the
business combination agreement, taking into account, among other things:



the
person making such Activision acquisition proposal;



the
likelihood that the transaction contemplated by such Activision acquisition proposal will be consummated and the timing thereof;

90



the
terms and conditions of the business combination agreement and such Activision acquisition proposal, including any conditions relating to financing, regulatory approvals
or other events or circumstances beyond the control of the party invoking the condition; and



any
revisions to the business combination agreement made or proposed in writing by Vivendi prior to the time of determination and any alternative transaction proposed in
writing by Vivendi in accordance with the business combination agreement.

Recommendation Change and Termination for Superior Proposal by Activision's Board of Directors

Activision's board of directors has agreed not to (a) withdraw or adversely and materially modify, or publicly propose to withdraw or adversely and
materially modify, its recommendation of the business combination agreement and the transaction, or (b) adopt or recommend, or publicly propose to adopt or recommend, any Activision acquisition
proposal.

Notwithstanding
the aforementioned obligations, Activision's board of directors may, at any time prior to the closing date, withdraw or adversely and materially modify, or publicly
propose to withdraw or adversely and materially modify, its recommendation of the business combination agreement and the transaction, if Activision's board of directors determines in good faith (after
consultation with its outside counsel) that the failure to take such action would be reasonably expected to constitute a breach of its fiduciary duties under applicable law.

Further,
at any time prior to obtaining the Activision stockholder approval, Activision's board of directors may, in response to an Activision acquisition proposal that did not result
from a breach of the business combination agreement and which Activision's board of directors determines in good faith constitutes an Activision superior proposal, (a) withdraw or adversely and
materially modify, or publicly
propose to withdraw or adversely and materially modify, its recommendation of the business combination agreement and the transaction; or adopt or recommend, or publicly propose to adopt or recommend,
any Activision acquisition proposal, or (b) cause Activision to terminate the business combination agreement and concurrently with or after such termination enter into an acquisition agreement
relating to such Activision superior proposal. However, Activision may only exercise any of the aforementioned rights if it has given three (3) business days prior written notice to Vivendi of
its intention to take such action, specifying in the notice the reasons for taking such action and the material terms and conditions of the Activision superior proposal that is the basis of the
proposed action. In determining whether to exercise its rights described above, Activision's board of directors has agreed to take into account any changes to the financial terms of the business
combination agreement proposed by Vivendi.

Obligation of Activision's Board of Directors with Respect to Holding a Stockholder Meeting

Under the terms of the business combination agreement, Activision's board of directors has agreed to convene a meeting of its stockholders for purposes of
obtaining the Activision stockholder approval. Subject to its rights described above, Activision's board of directors has agreed to recommend the approval of the principal terms of the business
combination agreement and the transaction, including, but not limited to, the issuance of shares of Activision common stock in the merger and the share purchase, to its stockholders.

Activision's
obligations to hold such a meeting will not be affected by (a) the commencement, public proposal, public disclosure or communication to Activision of any Activision
acquisition proposal, or (b) the withdrawal or modification by Activision's board of directors or any committee thereof of its approval or recommendation of the business combination agreement
and the transaction.

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Restrictions on Solicitation of Acquisition Proposals of Vivendi Games

Under the terms of the business combination agreement, each of Vivendi and Vivendi Games has agreed that it will not, and will not authorize or permit any of its
subsidiaries or their respective officers, directors, employees, agents and representatives (including any investment banker, attorney or accountant retained by Vivendi, Vivendi Games or any of its
respective subsidiaries) to, directly or indirectly:



solicit,
initiate or knowingly encourage any "Vivendi Games acquisition proposal" (as described below);



enter
into, continue or otherwise participate in any discussions or negotiations regarding, or furnish information to any person regarding any Vivendi Games acquisition
proposal; or



allow
Vivendi Games or any of its subsidiaries to execute, or enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar contract related to any Vivendi Games acquisition proposal.

In
addition, each of Vivendi and Vivendi Games has agreed to, and to cause each of its subsidiaries to, (a) immediately cease and cause to be terminated all existing discussions
or negotiations with any person conducted prior to the date of the business combination agreement with respect to any Vivendi Games acquisition proposal, and (b) request the prompt return or
destruction of all confidential information previously furnished.

As
used in this proxy statement, the term "Vivendi Games acquisition proposal" means any inquiry, proposal or offer relating to (a) the acquisition by any person of, or
(b) a merger, consolidation, business combination, reorganization, share exchange, recapitalization, liquidation, dissolution or similar transaction involving Activision or any of its
subsidiaries, which would result in any person acquiring:



20%
or more of the aggregate outstanding voting securities of Vivendi Games;



20%
or more of the outstanding shares of capital stock of Vivendi Games;



20%
or more of the fair market value, immediately prior to such transaction, of the assets (including capital stock of Vivendi Games' subsidiaries) of Vivendi Games and its
subsidiaries, taken as a whole; or



any
combination of the foregoing.

Termination; Termination Fees and Expenses

Termination

The business combination agreement may be terminated in accordance with its terms at any time prior to the closing date, whether before or after obtaining the
Activision stockholder approval:



by
mutual written consent of the parties, duly authorized by each party's board of directors;



by
either Vivendi or Activision:



if
the transaction is not completed on or before the ten (10) months anniversary of the execution of the business combination agreement. This date is referred to in
this proxy statement as "termination date." However, neither Vivendi nor Activision may terminate the business combination agreement on this basis if it has breached its obligations under the business
combination agreement in any material respect and such breach has been a

92

principal
cause of, or has resulted in, the failure of the transaction to be consummated on or before that date;



if
any law has been enacted, entered, enforced or deemed applicable to the transaction by a governmental entity that makes the consummation of the transaction illegal in the
United States or any foreign jurisdiction in which Activision or Vivendi has substantial business and operations;



if
any governmental entity in the United States or any foreign jurisdiction in which Activision or Vivendi has substantial business and operations has issued or granted any
order making the transaction illegal in the United States or any such foreign jurisdiction, and such order has become final and non-appealable; or



if
the Activision stockholder approval has not been obtained at a meeting duly convened therefor or at any adjournment or postponement thereof;



by
Vivendi (provided that none of Vivendi, VGAC or Vivendi Games is then in breach of any of their respective obligations under the business combination agreement), if there
is any continuing inaccuracy in the representations and warranties of Activision or Merger Sub set forth in the business combination agreement, or Activision or Merger Sub is then failing to perform
any of its covenants or other agreements set forth in the business combination agreement, in either case such that (a) certain conditions to Vivendi's and Vivendi Games' obligation to effect
the transaction would fail to be satisfied at the time of such termination, and (b) such inaccuracy or breach is not reasonably capable of being cured by Activision or Merger Sub prior to the
termination date;



by
Activision (provided neither it nor Merger Sub is then in breach of any of their respective obligations under the business combination agreement), if there is any
continuing inaccuracy in the representations and warranties of Vivendi, VGAC or Vivendi Games set forth in the business combination agreement, or Vivendi, VGAC or Vivendi Games is then failing to
perform any of its covenants or other agreements set forth in the business combination agreement, in either case such that (a) certain conditions to Activision's and Merger Sub's obligation to
effect the transaction would fail to be satisfied at the time of such termination, and (b) such inaccuracy or breach is not reasonably capable of being cured by Vivendi, VGAC or Vivendi Games
prior to the termination date;



by
Vivendi,



if
Activision's board of directors or any committee thereof (a) withdraws or adversely and materially modifies, or publicly proposes to withdraw or adversely and
materially modify, its recommendation of the business combination agreement and the transaction (except with respect to events or circumstances relating to Vivendi, VGAC or Vivendi Games), or
(b) adopts or recommends, or publicly proposes to adopt or recommend, any Activision acquisition proposal; or



if
Activision's board of directors fails to publicly reaffirm its recommendation of the business combination agreement and the transaction within ten (10) business
days following the date upon which a third party first commences a tender or exchange offer for shares of Activision capital stock;



by
Activision, pursuant to and in accordance with the terms and subject to the conditions discussed above with respect to an Activision superior proposal, provided that
Vivendi has received the termination fee discussed below not later than the first (1st) business day after such termination.

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Effect of Termination

If the transaction is terminated as described in the section entitled "Termination" above, the agreement will be void, and there will be no liability
or obligation of any party except that:



each
party will remain liable for its willful breach of the business combination agreement; and



designated
provisions of the business combination agreement, including the provisions regarding the termination fee described below, will survive termination.

Termination Fees and Expenses

Under the terms of the business combination agreement, Activision must (a) pay Vivendi a termination fee equal to $180 million and
(b) reimburse Vivendi for all of Vivendi's, VGAC's and Vivendi Games' actual and reasonably documented out-of-pocket expenses (including reasonable attorneys' fees)
actually incurred by Vivendi, VGAC and Vivendi Games on or prior to the
termination of the business combination agreement in connection with the business combination agreement and the transaction, up to a maximum of $15 million, in the event that:



the
business combination agreement is terminated by Vivendi because:



Activision's
board of directors or any committee thereof (a) withdraws or adversely and materially modifies, or publicly proposes to withdraw or adversely and
materially modify, its recommendation of the business combination agreement and the transaction (except with respect to events or circumstances relating to Vivendi, VGAC or Vivendi Games), or
(b) adopts or recommends, or publicly proposes to adopt or recommend, any Activision acquisition proposal;



Activision's
board of directors fails to publicly reaffirm its recommendation of the business combination agreement and the transaction within ten (10) business days
following the commencement of a third-party tender or exchange offer for Activision's capital stock;



the
business combination agreement is terminated by Activision in response to an Activision superior proposal in compliance with the provisions of the business combination
agreement; or



all
of the following three events have occurred:



prior
to the Activision stockholder meeting, an Activision acquisition proposal has been made directly to Activision's stockholders generally and not withdrawn, or has
otherwise become publicly known, or any person has publicly announced an intention (whether or not conditional) to make an Activision acquisition proposal;



thereafter
the business combination agreement is terminated by either Vivendi or Activision because (a) the transaction has not been consummated on or before the
termination date, or (b) the Activision stockholder approval has not been obtained; and



within
twelve (12) months after such termination, Activision enters into a definitive contract to consummate, or consummates, a transaction constituting an Activision
acquisition proposal.

Further,
in the event that the business combination agreement is terminated by either Activision or Vivendi due to a breach of any representation, warranty, covenant or agreement set
forth in the business combination agreement, the breaching party must reimburse the non-breaching party for its actual and reasonably documented out-of-pocket
expenses (including reasonable attorneys' fees) actually incurred by the non-breaching party on or prior to the termination of the business combination agreement in connection with the
business combination agreement and the transaction, up to a maximum of $15 million.

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Conduct of Business Prior to the Closing Date

Activision's Conduct of Business Prior to the Closing Date

Under the business combination agreement, Activision has agreed that, until the closing date and except (a) as set forth in Activision's disclosure
schedule to the business combination agreement, (b) as required by applicable law, (c) as required or contemplated by the business combination agreement, or (d) as consented to in
writing by Vivendi (which consent will not be unreasonably withheld, delayed or conditioned), it will (and will cause its subsidiaries to):



conduct
its business in the ordinary course;



use
its reasonable best efforts to preserve intact its business organizations and relationships with third parties and to keep available the services of its present officers
and employees; and



use
its reasonable best efforts to protect its intellectual property to the end that the goodwill and ongoing business of Activision and its subsidiaries will not be
impaired in any material respects as of the closing date.

In
addition, Activision has agreed that, until the closing date and except (a) as set forth in Activision's disclosure schedule to the business combination agreement,
(b) as required by applicable law, (c) as required or contemplated by the business combination agreement, or (d) as consented to in writing by
Vivendi (which consent will not be unreasonably withheld, delayed or conditioned), it will not (and will not permit its subsidiaries to), and will not propose or commit to:



pay
dividends (except for dividends by wholly-owned subsidiaries of Activision to their respective parent), reclassify stock or commence any stock repurchases;



issue
securities, subject to certain limited exceptions, including (a) the issuance of restricted shares and equity rights in the ordinary course of business and
consistent with past practice not to exceed three million (3,000,000) shares in the aggregate (excluding any shares or equity rights granted pursuant to the employment agreements entered into between
the Company and each of Messrs. Robert A Kotick and Brian G. Kelly concurrently with the execution of the business combination agreement), and (b) the authorization of additional
shares as required or contemplated by the business combination agreement or any ancillary agreement thereto;



amend
the certificate of incorporation or bylaws of Activision or any subsidiary of Activision;



acquire
by merger or consolidation, or by purchasing a substantial equity interest in or a substantial portion of the assets of, any business, corporation, partnership,
association or other business organization, other than acquisitions involving aggregate consideration of less than $75 million;



dispose
of any assets, other than in the ordinary course of business and dispositions of assets with an aggregate fair market value of less than $10 million;



make
loans or investments, subject to certain exceptions, including loans or investments in the ordinary course of business;



incur
indebtedness, subject to certain exceptions, including borrowings not to exceed $25 million in the aggregate;



make
changes to accounting methods, subject to certain limited exceptions;



commence
new capital expenditures, subject to certain exceptions, including (a) disclosed capital expenditures and (b) additional capital expenditures not
disclosed but made in the ordinary course of business and in an aggregate amount not to exceed an additional $20 million;

95



take
actions that would be reasonably likely to prevent or materially delay the consummation of the transaction;



discharge
any liabilities, subject to certain exceptions;



make
any material changes to, or waive any material right under, certain material contracts;



except
in the ordinary course of business, enter into any new material contract;



grant
liens in, sell, assign, abandon, license or sublicense any of Activision's material intellectual property rights (with the exception of licenses and other agreements
entered into in the ordinary course of business) or enter into any contract outside the ordinary course of business with respect to Activision's intellectual property;



make
changes in employee benefits, subject to certain exceptions;



effectuate
a plant closing or a mass layoff at any time within the 90-day period before the effective time of the merger without complying fully with the notice
and other requirements of the WARN Act;

engage
in transactions with any of its affiliates (except for transactions solely by and among Activision and any of Activision's wholly-owned subsidiaries);



engage
in any liquidation, dissolution, merger or similar transaction (other than the transaction and any other transactions involving solely Activision or any of
Activision's wholly-owned subsidiaries and Activision or one or more of its wholly-owned subsidiaries); and



authorize
any of, or announce an intention, or agree to take any of, the foregoing actions.

Vivendi Games' Conduct of Business Prior to the Closing Date

Under the business combination agreement, Vivendi Games has agreed that, until the closing date and except (a) as set forth in Vivendi Games' disclosure
schedule to the business combination agreement, (b) as required by applicable law, (c) as required or contemplated by the business combination agreement, or (d) as consented to in
writing by Activision (which consent will not be unreasonably withheld, delayed or conditioned), it will (and will cause its subsidiaries to):



conduct
its business in the ordinary course;



use
its reasonable best efforts to preserve intact its business organizations and relationships with third parties and to keep available the services of its present officers
and employees; and



use
its reasonable best efforts to protect its intellectual property to the end that the goodwill and ongoing business of Vivendi Games and its subsidiaries will not be
impaired in any material respects as of the closing date.

In
addition, Vivendi Games has agreed that, until the closing date and except (a) as set forth in Vivendi Games' disclosure schedule to the business combination agreement,
(b) as required by applicable law, (c) as required or contemplated by the business combination agreement, or (d) as consented to in writing by Activision (which consent will not
be unreasonably withheld, delayed or conditioned), it will not (and will not permit its subsidiaries to):



pay
dividends (except for cash dividends by Vivendi Games and its subsidiaries to their respective parents, provided that, at the closing of the transaction and after giving
effect to any such dividends, Vivendi Games and its subsidiaries will hold not less than $15 million in cash), reclassify stock, or commence any stock repurchases (except with respect to the
Blizzard equity plan);

96



issue
securities; subject to certain limited exceptions, including (a) the issuance of shares pursuant to the exercise of options to acquire shares of Blizzard common
stock that were outstanding on the date of the business combination agreement, and (b) the granting of options to acquire shares of Blizzard common stock and the granting of shares of
restricted Blizzard common stock in the ordinary course of business and consistent with past practice not to exceed one million two hundred fifteen thousand (1,215,000) shares in the aggregate;



amend
the certificate of incorporation or bylaws (or similar organizational documents) of Vivendi Games or any subsidiary of Vivendi Games;



acquire
by merger or consolidation, or by purchasing a substantial equity interest in or a substantial portion of the assets of, any business, corporation, partnership,
association or other business organization, other than acquisitions involving aggregate consideration of less than $75 million;



dispose
of any assets, other than other than in the ordinary course of business and dispositions of assets with an aggregate fair market value of less than
$10 million;



make
loans or investments, subject to certain exceptions, including loans or investments in the ordinary course of business;



incur
indebtedness, subject to certain exceptions, including for borrowings not to exceed $25 million in the aggregate;



make
changes to accounting methods, subject to certain exceptions;



commence
new capital expenditures, subject to certain exceptions, including (a) disclosed capital expenditures, (b) any capital expenditure to acquire hardware
or software related to the business of Blizzard Entertainment not to exceed $50 million in the aggregate, and (c) additional capital expenditures not disclosed but made in the ordinary
course of business and in an aggregate amount not to exceed an additional $10 million;



take
actions that would be reasonably likely to prevent or materially delay the consummation of the transaction;



discharge
any liabilities, subject to certain exceptions;



make
any material changes to, or waive any material right under, certain material contracts;



except
in the ordinary course of business and except for the termination of certain contracts specified in the business combination agreement, enter into any new material
contract;



grant
liens in, sell, assign, abandon, license or sublicense any of Vivendi Games' material intellectual property rights (with the exception of licenses and other agreements
entered into in the ordinary course of business) or enter into any contract outside the ordinary course of business with respect to Vivendi Games' intellectual property;



make
changes in employee benefits, subject to certain limited exceptions;



effectuate
a plant closing or a mass layoff at any time within the 90-day period before the effective time of the merger without complying fully with the notice
and other requirements of the WARN Act;

engage
in transactions with any of its affiliates (except for transactions solely by and among Vivendi Games and any of Vivendi Games' wholly-owned subsidiaries);

97



engage
in any liquidation, dissolution, merger or similar transaction (other than the transaction and transactions involving solely Vivendi Games or any of Vivendi Games'
wholly-owned subsidiaries and Vivendi Games or one or more of its wholly-owned subsidiaries); and



authorize
any of, or announce an intention, or agree to take any of, the foregoing actions.

Certain Other Covenants

Reasonable Best Efforts to Complete the Transaction

Under the terms of the business combination agreement, each of Activision, Merger Sub, Vivendi, VGAC and Vivendi Games has agreed to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under
applicable laws and regulations to complete the transaction in the most expeditious manner practicable, including:



preparing
and filing as soon as practicable all forms, registrations and notices required to be filed to consummate the transaction and the taking of such reasonable actions
as are necessary to obtain any requisite approvals, consents, orders, exemptions or waivers by any third party or governmental entity, including:



filings
pursuant to the HSR Act with the FTC and the Antitrust Division; and



filings
of any forms or reports required by the European Commission or any other governmental entity required under any foreign antitrust laws;



defending
any lawsuits or other legal proceedings, whether judicial or administrative, challenging the business combination agreement, any ancillary agreement thereto, or
the consummation of the merger, including seeking to have any stay or temporary restraining order entered by any court or other governmental entity vacated or reversed until the issuance of a final,
non-appealable order; and



using
reasonable best efforts to cause the satisfaction of all conditions to the closing of the transaction.

Notwithstanding
the above, none of Activision, Merger Sub, Vivendi, VGAC and Vivendi Games is required to enter into any consent arrangement that would be reasonably expected to have a
material adverse effect on the benefits that are expected to derive from the transaction.

In
addition, each of Activision, Merger Sub, Vivendi, VGAC and Vivendi Games has agreed to consult with the other with respect to, provide any necessary information with respect to and
provide the other (or its counsel) copies of, all filings made by such party with any governmental entity or any other information supplied by such party to a governmental entity in connection with
the business combination agreement, any ancillary agreement thereto, or the consummation of the transaction.

Access to Information

Under the business combination agreement, each of Activision and Vivendi Games has agreed to, and to cause each of its subsidiaries to, (a) afford to the
other parties to the business combination agreement and their respective officers, employees, accountants, counsel, agents and other representatives reasonable access to all of their properties,
personnel, books and records (including tax returns filed and those in preparation, workpapers and other items relating to taxes), and (b) furnish promptly all information concerning its
business, properties and personnel as such other parties may reasonably request. Any such access will be conducted under the supervision of personnel of the party providing such access and in a manner
that does not interfere with the party's normal operations.

98

Notwithstanding
the obligations described above, none of Activision or Vivendi Games is required to disclose any information that, in its sole and absolute discretion, (a) it is
not legally permitted to disclose or the disclosure of which would contravene any applicable law or order (including any antitrust law) or (b) the disclosure of which would be reasonably likely
to cause the loss of any attorney-client or other legal privilege.

Director and Officer Indemnification

Under the terms of the business combination agreement, Activision has agreed to honor, for a period of six (6) years after the effective time of the
merger, all obligations of Vivendi Games and Vivendi Games' subsidiaries contained in any indemnification agreement in effect immediately prior to the
effective time of the merger between Vivendi Games or any of Vivendi Games' subsidiaries and any of their current or former directors and officers and any person who becomes a director or officer of
Vivendi Games or any of Vivendi Games' subsidiaries prior to the effective time of the merger.

In
addition, for a period of six (6) years after the effective time of the merger, Activision and its subsidiaries (a) will cause the certificate of incorporation and
bylaws (and other similar organizational documents) of Vivendi Games, as the surviving corporation of the merger, and Vivendi Games' subsidiaries to contain provisions with respect to indemnification
and exculpation of their respective officers and directors that are at least as favorable as the indemnification and exculpation provisions contained in the certificate of incorporation and bylaws (or
other similar organizational documents) of Vivendi Games immediately prior to the effective time of the merger, and (b) will not amend, repeal or otherwise modify such provisions in any
respect, except as required by applicable law.

In
the event that Vivendi Games, as the surviving corporation of the merger, or any of its successors or assigns, consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of the consolidation or merger, or transfers all or substantially all of its properties and assets to any person, then, in each case, proper provisions
must be made to ensure that the successors and assigns of Vivendi Games will assume the aforementioned indemnification and exculpation obligations of Vivendi Games.

Director and Officer Insurance

For a period of six (6) years after the effective time of the merger, Vivendi will (and will cause Activision to) maintain in effect Activision's existing
directors' and officers' liability insurance policy covering claims arising from facts or events occurring at or prior to the effective time of the merger (including acts or omissions occurring in
connection with the business combination agreement and the consummation of the transaction and covering each indemnified party who is covered as of the effective time of the merger by Activision's
existing directors' and officers' liability insurance policy on terms with respect to coverage and amounts no less favorable than those in effect on the date of the business combination agreement.

However,
neither Vivendi nor Activision will be required to pay annual premiums in excess of 250% of the current annual premium paid by Activision for such insurance. If the annual
premiums of such insurance coverage exceed such amount, Activision will be obligated to obtain a policy with the greatest coverage available for a cost not exceeding 250% of the current annual
premium.

Release of Guarantees

Vivendi, Vivendi Games and Activision will cooperate and use their reasonable best efforts to obtain, effective as of the closing date, the release of Vivendi and
its affiliates (other than Vivendi Games and its subsidiaries) from any guarantee, performance bond, surety bond or other similar agreement relating to the operation of the business of Vivendi Games
or any of its subsidiaries. Activision will indemnify Vivendi and its affiliates (other than Vivendi Games and its subsidiaries) for

99

any
payments required to be made under, or costs incurred in connection with, any unreleased guarantee following the closing of the transaction.

Employee Benefits

For one year after the completion of the transaction, Activision Blizzard will maintain and comply with the severance policies, plans and agreements of Vivendi
Games and its subsidiaries in effect immediately prior to the closing or otherwise provide severance benefits to employees of those entities that are no less generous in the aggregate than those
provided under such policies, plans and agreements in effect immediately prior to the completion of the transaction.

Representations and Warranties

The business combination agreement contains general representations and warranties made by each of Activision and Merger Sub, on the one hand, and Vivendi, VGAC
and Vivendi Games, on the other hand, regarding aspects of their respective businesses, financial condition and structure, as well as other facts pertinent to the transaction. These representations
and warranties are subject to materiality, knowledge and other similar qualifications in many respects, and expire at the closing of the transaction.

Representations and Warranties by Activision and Merger Sub

Each of Activision and Merger Sub has made a number of representations and warranties to Vivendi, VGAC and Vivendi Games in the business combination agreement,
including representations and warranties relating to the following matters:



corporate
organization, qualifications to do business and corporate standing;



capital
structure and absence of restrictions or encumbrances with respect to the capital stock of Activision;



corporate
organization, qualifications to do business and corporate standing of Activision's subsidiaries;



ownership
of, and absence of restrictions or encumbrances with respect to, capital stock of Activision's subsidiaries;



corporate
authority to enter into the business combination agreement and the ancillary agreements thereto and to consummate the transaction;



Activision
stockholder approval;



governmental
and regulatory approvals required to complete the transaction;



absence
of any conflict or violation of the corporate charter and bylaws of Activision and its subsidiaries, any applicable legal requirements, or any agreements with third
parties, as a result of entering into and carrying out the obligations contained in the business combination agreement;



maintenance
of books and records by Activision and its subsidiaries;



Activision's
SEC filings and the financial statements contained in those filings;

absence
of a material adverse effect with respect to Activision since March 31, 2007;



absence
of undisclosed liabilities of Activision or any of its subsidiaries;

100



Activision's
benefit plans, employees and employment practices;



compliance
with employment/labor contracts and laws by Activision, its subsidiaries and their officers, employees and consultants whose annual salary exceeds $200,000;



absence
of collective bargaining arrangements and labor controversies at Activision or any of its subsidiaries;



material
contracts and the absence of breaches of material contracts to which Activision or any of its subsidiaries is a party;



litigation
involving Activision or any of its subsidiaries;



compliance
with applicable law by Activision, Activision's subsidiaries and their respective officers and directors;



Activision's
and Activision's subsidiaries' taxes and tax returns;



environmental
matters;



inapplicability
of state takeover statutes;



intellectual
property of Activision and its subsidiaries;



absence
of indemnifiable claims against Activision or any of its subsidiaries;



receipt
by Activision of a fairness opinion from Allen & Company LLC;



approval
by the boards of directors of Activision and Merger Sub of the business combination agreement, the ancillary agreements thereto to which Activision is a party, and
the transaction;



any
person's entitlement to a broker's, finder's, financial advisor's or other similar fee or commission in connection with the transaction;



accuracy
of the information supplied by or on behalf of Activision for this proxy statement; and



interim
operations of Merger Sub.

Representations and Warranties by Vivendi, VGAC and Vivendi Games

Each of Vivendi, VGAC and Vivendi Games has made a number of representations and warranties to Activision and Merger Sub in the business combination agreement,
including representations and warranties relating to the following matters:



corporate
organization, qualifications to do business and corporate standing of Vivendi and Vivendi Games;



capital
structure, absence of restrictions or encumbrances with respect to, and ownership VGAC of the capital stock of Vivendi Games;



corporate
organization, qualifications to do business and corporate standing of Vivendi Games' subsidiaries;

corporate
authority to enter into the business combination agreement and the ancillary agreements thereto and to consummate the transaction;



governmental
and regulatory approvals required to complete the transaction;

101



absence
of any conflict or violation of the corporate charter and bylaws (or any similar organizational documents) of Vivendi, VGAC, Vivendi Games and Vivendi Games'
subsidiaries, any applicable legal requirements, or any agreements with third parties, as a result of entering into and carrying out the obligations contained in the business combination agreement;



maintenance
of books and records by Vivendi Games and its subsidiaries;



financial
statements of Vivendi Games and its subsidiaries;



internal
accounting controls of Vivendi Games;



absence
of a material adverse effect with respect to Vivendi Games since December 31, 2006;



absence
of undisclosed liabilities of Vivendi Games and any of its subsidiaries;



benefit
plans, employees and employment practices of Vivendi Games and its subsidiaries;



compliance
with employment/labor contracts and laws by Vivendi Games, its subsidiaries and their officers, employees and consultants whose annual salary exceeds $200,000;



absence
of collective bargaining arrangements and labor controversies at Vivendi Games and its subsidiaries;



material
contracts and the absence of breaches of material contracts to which Vivendi Games or any of its subsidiaries is a party;



litigation
involving Vivendi Games or any of its subsidiaries;



compliance
with applicable law by Vivendi Games and its subsidiaries;



taxes
and tax returns filed by Vivendi Games and its subsidiaries;



environmental
matters;



inapplicability
of state takeover statutes;



intellectual
property of Vivendi Games and its subsidiaries;



absence
of indemnifiable claims against Vivendi Games or any of its subsidiaries;



approval
by the boards of directors of Vivendi, VGAC and Vivendi Games of the business combination agreement, the ancillary agreements thereto to which Vivendi, VGAC or
Vivendi Games is a party, and the transaction;



approval
by VGAC, the sole stockholder of Vivendi Games of the business combination agreement and the transaction;



any
person's entitlement to a broker's, finder's, financial advisor's or other similar fee or commission in connection with the transaction; and



accuracy
of the information supplied by or on behalf of Vivendi or Vivendi Games for this proxy statement.

The representations and warranties described in this proxy statement and included in the business combination agreement were made by each of Activision and Merger
Sub, on the one hand, and Vivendi, VGAC and Vivendi Games, on the other hand, as of specific dates. The assertions embodied in those representations and warranties were made solely for purposes of the
business combination agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating its terms. Moreover, the representations and
warranties may be subject to a contractual standard of materiality that is different from what may be viewed as material to stockholders, or may have been used for the purpose of allocating risk
between the parties rather than establishing matters as facts. The business

102

combination agreement is described in this proxy statement and included as Annex A solely to provide you with information regarding its terms and conditions, and not to provide any other
factual information regarding the parties or their respective businesses. Accordingly, you should not rely on the representations and warranties in the business combination agreement as
characterizations of the actual state of facts about the parties, and you should read the information provided elsewhere in this proxy statement and in the documents incorporated by reference into
this proxy statement for information regarding the parties and their respective businesses. See the section entitled "Where You Can Find More Information."

Miscellaneous

Amendment and Waiver

The business combination agreement may be amended by Activision, Merger Sub, Vivendi, VGAC and Vivendi Games, only by action taken by or on behalf of their
respective boards of directors, at any time prior to (but not following) the closing date. Notwithstanding the foregoing, (a) following the Activision stockholder approval, the business
combination agreement may not be amended without approval by Activision's stockholders, and (b) after the closing date, the business combination agreement may not be amended without approval by
a majority of the independent directors of Activision.

Expenses Generally

All fees and expenses incurred in connection with the business combination agreement and the transaction and the tender offer (including all fees and expenses of
agents, representatives, counsel, financial advisors and accountants) will be paid by the party incurring the fees or expenses. Notwithstanding the foregoing, the fees and expenses of Goldman,
Sachs & Co. and Gibson, Dunn & Crutcher LLP, respectively the financial and legal advisors to Vivendi and Vivendi Games, will be paid by Vivendi.

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CERTAIN AGREEMENTS RELATED TO THE TRANSACTION

The following summary describes the material provisions of the voting and lock-up agreements, the investor agreement and the
tax sharing agreement, which have been or will be entered into in connection with the transaction. Copies of the voting and lock-up agreements are attached as Annexes E and F to
this proxy statement and are incorporated by reference into this proxy statement. Copies of the investor agreement and the tax sharing agreement are attached to the business combination agreement as
Exhibit D and Exhibit E, respectively, and are incorporated by reference into this proxy statement. The rights and obligations of the parties to the voting and lock-up
agreements, the investor agreement and the tax sharing agreement are governed by the express terms and conditions of the voting and lock-up agreements, the investor agreement and the tax
sharing agreement, respectively, and not by this summary. This summary may not contain all of the information about the voting and lock-up agreements, the investor agreement and the tax
sharing agreement that may be important to you and is qualified in its entirety by reference to the complete text of the voting and lock-up agreements, the investor agreement and the tax
sharing agreement. We encourage you to read the voting and lock-up agreements, the investor agreement and the tax sharing agreement carefully and in their entirety for a more complete
understanding of these agreements.

Voting and Lock-Up Agreements

Concurrently with the execution of the business combination agreement, on December 1, 2007, Vivendi and Activision entered into voting and
lock-up agreements with two stockholders of Activision. The two stockholders that are a party to the voting and lock-up agreements are Messrs. Robert A. Kotick,
Activision's Chairman and Chief Executive Officer; and Brian G. Kelly, Activision's Co-Chairman. Messrs. Kotick and Kelly are referred to in this proxy statement,
collectively, as the "management stockholders."

Agreement to Vote

Under the terms of the voting and lock-up agreements, the management stockholders have agreed that they will, between the execution of the voting and
lock-up agreements and the earlier to occur of the closing of the transaction and the termination of the voting and lock-up agreements:



appear
(in person or by proxy) at any annual or special meeting of Activision's stockholders for the purpose of obtaining a quorum; and



vote
or, if requested, execute proxies with respect to (a) all shares of Activision common stock owned beneficially or of record by the management stockholders as of
the date of the voting and lock-up agreements (or over which the management stockholders exercise voting power) as well as (b) all additional shares of Activision common stock that
the management stockholders purchase or otherwise acquire beneficial ownership of during the period from the date of the voting and lock-up agreements through the termination of the voting
and lock-up agreements, as follows:



in
favor of approval of the business combination agreement and the transaction at every meeting of Activision's stockholders (and any adjournment or postponement thereof) at
which such matters are considered;



against
any proposal which would reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of
(a) Activision under the business combination agreement or (b) the management stockholders under the voting and lock-up agreements; and



against
any Activision acquisition proposal.

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Transfer Restrictions

The management stockholders have also agreed to certain restrictions on the transfer of (a) shares of Activision common stock and other equity securities
of Activision beneficially owned by the management stockholders as of the date of the voting and lock-up agreements, and (b) all additional shares of Activision common stock and
other equity securities of Activision of which the management stockholders acquire beneficial ownership prior to the termination of the voting and lock-up agreements. These securities are
referred to in this proxy statement as the "subject securities."

Between
the execution of the voting and lock-up agreements and the closing of the transaction, the management stockholders will not, without Vivendi's prior written consent
(a) transfer, or enter into any agreement with respect to a transfer of, any of the subject securities or any interest therein, (b) grant any proxies, options or rights of first offer or
refusal with respect to any of the subject securities, or (c) enter into any voting agreement, voting trust or other voting arrangement with respect to any of the subject securities.

In
addition, for a period of one hundred twenty (120) days after the closing date, the management stockholders will not, without Vivendi's prior written consent
(a) transfer (including pursuant to the tender offer), or enter into any agreement with respect to a transfer of, more than 331/3% of the subject securities, or (b) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the subject securities' economic consequences of ownership. Notwithstanding the foregoing and subject to
certain limitations, the aforementioned restrictions will not apply to a transfer of the subject securities by gift, will or intestacy.

Registration Rights

The voting and lock-up agreements also provide for certain registration rights of the management stockholders.

Demand Registration Rights

After the expiration of the 120-day lock-up period described above, each of the management stockholders will be entitled to demand that
Activision prepare and file with the SEC a registration statement relating to the sale of their securities of Activision, including in an
underwritten offering, so long as such securities have a market value of at least $50 million or represent all of the securities then held by such management stockholder.

Upon
receipt of a demand notice, Activision is required to promptly give notice of such requested registration to all persons that may be entitled to participate in such sale.
Thereafter, Activision must (a) prepare and file a registration statement with the SEC as soon as possible, but no later than ninety (90) days after receipt of the demand notice
(subject to the right of Activision described below to delay such filing), and (b) use its reasonable efforts to have the registration statement declared effective as promptly as practicable
after filing. Additionally, Activision is required to use reasonable efforts to keep the registration statement effective until the earlier of (x) one (1) year (in the case of a shelf
registration statement) or sixty (60) days (in the case of any other registration statement) from the effective time of such registration statement and (y) such time as all the
applicable securities are sold. Activision is not required to file more than two (2) registration statements relating to underwritten offerings, or two (2) registration statements which
have become and remained effective in any twenty-four (24) months period.

Activision
is permitted to postpone (or, if necessary or advisable, withdraw) the filing for a period that does not exceed one hundred twenty (120) days, if a majority of
Activision's independent directors determines in good faith that the offering (a) would interfere with any pending material financing, acquisition, corporate reorganization or other corporate
transaction involving Activision or any of its

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subsidiaries,
(b) would require disclosure of any event or condition that such directors determine would be disadvantageous for Activision to disclose and which Activision is not otherwise
required to disclose at such time, or (c) would otherwise be materially detrimental to Activision and its subsidiaries, taken as a whole.

Piggyback Registration Rights

The voting and lock-up agreements also provide the management stockholders with piggyback registration rights such that if, after the expiration of
the 120-day lock-up period described above, Activision proposes to file a registration statement (other than a registration statement on Form S-8 or
Form S-4) in connection with a public offering of any securities of Activision, Activision is required to give at least ten (10) business days prior written notice of such
proposed filing to the management stockholders, and the notice must offer the management stockholders the opportunity to register such number of securities as each of the management stockholders may
request. Upon receipt of such notice, the management stockholders have seven (7) business days to specify the amount of securities to be included in the proposed registration.

In
connection with an underwritten offering, if the managing underwriter advises that, in its good faith view, there is a maximum number of shares that may be offered, Activision's
shares have first priority, and shares of other holders have second priority. All piggyback registration rights are in addition to any demand registration rights, and no piggyback registration of
shares will relieve Activision of its obligation to provide a demand registration.

Expenses

Activision will bear all registration expenses specified in the voting and lock-up agreements as well as all other expenses incurred by it in
connection with the performance of its obligations under the lock-up agreements. The management stockholders will bear all other expenses relating to any registration or sale in which the
management stockholders participate.

Termination

The voting and lock-up agreements will automatically terminate upon the earlier to occur of (a) the termination of the business combination
agreement pursuant to its terms prior to the closing of the transaction, (b) the mutual agreement between Vivendi and the management stockholders, and (c) the date that is one hundred
twenty (120) days after the closing date. However, the demand registration rights and piggyback registration rights will survive the termination of the voting and lock-up agreements
until the earlier to occur of (a) the management stockholders' securities of Activision becoming transferable without volume restrictions pursuant to Rule 144(k) of the Securities Act,
and (b) the first occurrence of a Termination Event.

Investor Agreement

Activision, Vivendi, VGAC and Vivendi Games have agreed to enter into an investor agreement on the closing date, in form and substance attached as
Exhibit D to the business combination agreement, a copy of which is attached as Annex A to this proxy statement. Given that the proposed investor agreement will only take effect on the
closing date, the following description refers to Activision Blizzard, the combined company following completion of the transaction.

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Agreement to Vote

The proposed investor agreement provides that, prior to the first occurrence of a Termination Event, Vivendi and VGAC will vote all shares of Activision Blizzard
common stock owned by them and their respective controlled affiliates:



in
favor of (a) the nominees proposed for election as directors of Activision Blizzard by the independent nominating committee, subject to certain limited exceptions,
and (b) the nominees proposed for election as directors of Activision Blizzard by the executive nominating committee, in each case, so long as such nominees are nominated in accordance with the
post-closing certificate of incorporation and post-closing bylaws; and



against
all proposals to remove any independent or executive directors other than in the event of malfeasance.

Vivendi Equity Awards

Reimbursement for Stock-Settled Equity Award Expenses

Under the terms of the proposed investor agreement, Activision Blizzard will reimburse Vivendi for expenses recorded by Vivendi and its controlled affiliates in
connection with stock option and restricted stock awards to purchase shares of Vivendi common stock that were granted to Vivendi Games' employees between January 1, 2004 and the closing date.

Payment of Cash-Settled Equity Awards

Under the terms of the proposed investor agreement, Vivendi Games will be responsible for the payment of all amounts that are payable to its employees upon
exercise of stock appreciation rights and/or restricted stock units with respect to shares of Vivendi common stock that were granted to Vivendi Games' employees prior to the closing date under
Vivendi's stock option and other equity-based plans.

Reimbursement for Certain Social Security Contributions

Under the terms of the proposed investor agreement, Vivendi Games will be responsible for the payment of all amounts payable to
Mr. Jean-Francois Grollemund, the current Chief Financial Officer of Vivendi Games, under his employment agreement with Vivendi. In addition, Activision Blizzard or Vivendi Games
will reimburse Vivendi quarterly for all contributions to the French social security system in respect of Mr. Grollemund's employment.

Use of Transaction Proceeds

Vivendi and VGAC will acknowledge and agree that the cash consideration paid pursuant to the business combination agreement may be used by Activision Blizzard for
its general corporate purposes, including payment of any fees and expenses in connection with the settlement of certain legal proceedings related to Activision's historical stock option grant
practices.

Financial Statements

In order to facilitate the consolidation of Activision Blizzard and Vivendi for financial reporting purposes, Activision Blizzard will provide Vivendi with
Activision Blizzard's quarterly consolidated financial statements through, and use its reasonable best efforts to comply with, Vivendi's consolidation and financial reporting process. Activision
Blizzard will also provide certain financial and tax-related information with respect to Activision Blizzard and its subsidiaries in order for Vivendi to comply with

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its
reporting obligation under the "bénéfice mondial consolidé" tax scheme recognized and authorized by the French Ministry of the Economy and Finance.

To
the extent required to enable Vivendi to comply with applicable French tax or regulatory requirements, including those with respect to the "bénéfice
mondial consolidé" tax scheme, Activision Blizzard will provide Vivendi with a draft copy of each tax return required to be filed by Activision Blizzard or any of Activision Blizzard's
subsidiaries at least forty (40) business days prior to the due date.

The
aforementioned provisions regarding financial statements will remain in effect until the first occurrence of a Termination Event, except that Activision Blizzard's obligation to
provide quarterly financial statements will continue following such a disposition if Activision Blizzard is no longer required to file periodic reports with the SEC pursuant to the Exchange Act.

Registration Rights

The proposed investor agreement will grant certain registration rights to each of (a) Vivendi, (b) any of Vivendi's controlled affiliates, and
(c) each holder of securities of Activision Blizzard that acquires from Vivendi or any of Vivendi's affiliates a number of shares of Activision Blizzard common stock that, as of the time of
such acquisition, constitutes 10% or more of the aggregate number of issued and outstanding shares of Activision Blizzard common stock. The aforementioned persons are referred to in this proxy
statement, collectively, as the "Activision Blizzard security holders."

Demand Registration Rights

Commencing one hundred twenty (120) days after the closing date, each of the Activision Blizzard security holders will be entitled to demand that
Activision Blizzard prepare and file with the SEC a registration statement relating to the sale of their securities of Activision Blizzard, including in an underwritten offering, so long as such
securities (a) have a market value of at least $500 million, (b) represent at least 10% of the outstanding Activision Blizzard common stock, or (c) with respect to Vivendi
and its controlled affiliates, represent all of Activision Blizzard's securities then held by Vivendi and its controlled affiliates.

Upon
receipt of a demand notice, Activision Blizzard is required to promptly give notice of such requested registration to all persons that may be entitled to participate in such sale.
Thereafter, Activision Blizzard must (a) prepare and file a registration statement with the SEC as soon as possible, but no later than ninety (90) days after receipt of the demand
notice (subject to the right of Activision Blizzard described below to delay such filing), and (b) use its reasonable efforts to have the registration statement declared effective as promptly
as practicable after filing. Additionally, Activision Blizzard is required to use reasonable efforts to keep the registration statement effective until the earlier of (x) one (1) year
(in the case of a shelf registration statement) or sixty (60) days (in the case of any other registration statement) from the effective time of such registration statement and (y) such
time as all the applicable securities are sold. Activision Blizzard is not required to file more than four (4) registration statements relating to underwritten offerings, or two
(2) registration statements which have become and remained effective in any twenty-four (24) months period.

Activision
Blizzard is permitted to postpone (or, if necessary or advisable, withdraw) the filing for a period that does not exceed one hundred twenty (120) days, if a majority of
Activision Blizzard's independent directors determines in good faith that the offering (a) would interfere with any pending material financing, acquisition, corporate reorganization or other
corporate transaction involving Activision Blizzard or any of its subsidiaries, (b) would require disclosure of any event or condition that such directors determine would be disadvantageous for
Activision Blizzard to disclose and which Activision Blizzard is not otherwise required to disclose at such time, or (c) would otherwise be materially detrimental to Activision Blizzard and its
subsidiaries, taken as a whole.

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Piggyback Registration Rights

The investor agreement also provides piggyback registration rights such that if, after the expiration of the one hundred twenty (120) day period described
above, Activision Blizzard proposes to file a registration statement (other than a registration statement on Form S-8 or Form S-4) in connection with a
public offering of any securities of Activision Blizzard, Activision Blizzard is required to give at least ten (10) business days prior written notice of such proposed filing to the Activision
Blizzard security holders (provided that Activision Blizzard will not be obligated to provide such notice to any person other than Vivendi and its controlled affiliates unless either Vivendi or one of
its controlled affiliates has provided written notice to Activision Blizzard that such other person qualifies as "holder" within the meaning of the investor agreement). The notice must offer the
opportunity to register such number of securities as each of the Activision Blizzard security holders may request. Upon receipt of such notice, the Activision Blizzard security holders have seven
(7) business days to specify the amount of securities to be included in the proposed registration.

In
connection with an underwritten offering, if the managing underwriter advises that, in its good faith view, there is a maximum number of shares that may be offered, Activision
Blizzard's shares have first priority, and shares of other holders have second priority. All piggyback registration rights are in addition to any demand registration rights, and no piggyback
registration of shares will relieve Activision Blizzard of its obligation to provide a demand registration.

Expenses

Activision Blizzard will bear all registration expenses specified in the investor agreement as well as all other expenses incurred by it in connection with the
performance of its obligations under the investor agreement. Each Activision Blizzard security holder that is entitled and elects to sell securities pursuant to a demand registration or piggyback
registration will bear its other expenses relating to any registration or sale in which it participates.

Notice of Control Block Sales

At least five (5) business days prior to execution of any agreement with respect to a "control block sale" (as described below), each of Vivendi and VGAC
will provide the Activision Blizzard board of directors with (a) written notice of its intention to enter into such agreement and (b) the identity of the prospective purchaser(s) and the
financial terms of such control block sale.

As
used in this proxy statement, the term "control block sale" means a sale or transfer by Vivendi or any of its controlled affiliates to an unaffiliated third party in a privately
negotiated transaction (and not pursuant to a registration statement or trades on a national securities exchange or NASDAQ) of ownership of a number of shares of Activision Blizzard common stock that
would, upon consummation of such transaction, result in such unaffiliated third party (or any "group" within the meaning of Section 13(d) or 14(d) of the Exchange Act of which it is a member)
becoming the beneficial owner of (a) more than 50% of the then-outstanding shares of Activision Blizzard common stock or (b) a percentage of the then-outstanding
Activision Blizzard common stock that exceeds the percentage of outstanding Activision Blizzard common stock owned of record by Vivendi and Vivendi's controlled affiliates after giving effect to such
transaction.

Termination

The proposed investor agreement will automatically terminate upon the occurrence of a Termination Event.

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Tax Sharing Agreement

VHIC and Activision have agreed to enter into a tax sharing agreement on the closing date in substantially the form attached as Exhibit E to the business
combination agreement, a copy of which is attached as Annex A to this proxy statement. Given that the proposed tax sharing agreement will only take effect on the closing date, the following
description refers to Activision Blizzard, the combined company following completion of the transaction.

Filing of Group Tax Returns

Under the proposed tax sharing agreement, Activision Blizzard and/or any of its subsidiaries, which are referred to in this proxy statement, collectively, as the
"Activision Blizzard subgroup," will join with VHIC in filing certain consolidated, combined or unitary income or franchise tax returns that VHIC may elect or be required to file. Each of these tax
returns is referred to in this proxy statement as a "group tax return."

Tax Liability and Payment

Under the proposed tax sharing agreement, Activision Blizzard will generally pay directly to the appropriate taxing authorities or otherwise discharge the tax
liability of the Activision Blizzard subgroup. However, in the event that any Activision Blizzard subgroup member joins VHIC in the filing of a group tax return, Activision Blizzard will pay the
Activision Blizzard subgroup's share of the tax liability for such group tax return to VHIC, and VHIC will pay the tax liability for the entire group to the appropriate taxing authority. Activision
Blizzard will calculate the tax liability of the Activision Blizzard subgroup for any group tax return at least sixty (60) days prior to the due date of such tax return. In calculating the
Activision Blizzard subgroup's tax liability under any group tax return, Activision Blizzard will determine its tax liability on a hypothetical basis as if the Activision Blizzard subgroup was filing
its own separate group tax return. If Activision Blizzard would be required to make estimated payments of tax determined on such hypothetical basis, Activision Blizzard will make a good faith estimate
of its tax liability pursuant to the hypothetical separate group tax return calculation, and pay such amount to VHIC.

If
VHIC and Activision Blizzard disagree as to Activision Blizzard's calculation of its hypothetical separate tax return liability, the dispute will be resolved by Activision Blizzard's
independent public accountants, unless Activision Blizzard's public accountants determine that making any such recommendation may conflict with their status of remaining independent, in which case the
dispute will be resolved by the tax group of another nationally recognized independent accounting firm of Activision Blizzard's choosing. VHIC and Activision Blizzard will determine Activision
Blizzard's actual tax liability pursuant to the hypothetical separate group tax return calculation for each group tax return after the end of each taxable year and compare such amount to Activision
Blizzard's actual payments to VHIC in respect of estimated taxes. Based on such comparison, VHIC and Activision Blizzard will make adjusting payments to address any overpayments or underpayments of
tax by Activision Blizzard.

Under
the proposed tax sharing agreement, unless otherwise required by applicable law, VHIC and Activision Blizzard will not take any actions in connection with any tax return or
settlement of any tax contest that is reasonably expected to increase the tax liability of the other party, result in a reduction of a beneficial tax item of the other party or result in an increased
liability of the other party under the proposed tax sharing agreement.

Indemnification

VHIC will indemnify the members of the Activision Blizzard subgroup for any tax liability imposed on the Activision Blizzard subgroup due to VHIC's failure to pay
any group tax return tax liability, less any payments that Activision Blizzard owes to VHIC under the proposed tax sharing agreement. VHIC

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will
also indemnify the members of the Activision Blizzard subgroup for any tax liability of VHIC arising in a tax period prior to the closing date that is in excess of the amount reserved for such
tax liability on the VHIC balance sheet for the quarter ended immediately prior to the closing date (VHIC will not, however, make any representation as to or warrant or guarantee the existence or
value of any net operating losses, credits or other tax attributes of VHIC or any of its subsidiaries). In addition, VHIC will indemnify Activision Blizzard for any tax liability arising as a result
of a disallowance by any taxing authority of any deduction as an "excess parachute payment" pursuant to Section 280G of the Internal Revenue Code or similar state or local tax law relating to
any payment or benefit (a) in effect on or prior to the closing date and provided under any VHIC or Vivendi Games compensatory or similar arrangement and (b) arising as a result of the
consummation of the transaction.

Activision
Blizzard will indemnify VHIC for any tax liability imposed on VHIC or any of its subsidiaries (other than members of the Activision Blizzard subgroup) due to Activision
Blizzard's failure to pay any taxes of the Activision Blizzard subgroup, less any payments that VHIC owes to Activision Blizzard under the proposed tax sharing agreement.

Tax Contests

The proposed tax sharing agreement provides that, in the case of any tax contests with any taxing authority involving a group tax return, Activision Blizzard will
control the course of any proceedings with respect to such tax contests focused on tax items of any member of the Activision Blizzard subgroup, and VHIC will control all other such contests. Prior to
entering into any settlement of any such tax contest with any taxing authority, the party controlling the tax contest is required to obtain the consent of the other party to the proposed tax sharing
agreement, which consent will not be unreasonably withheld. However, if the parties disagree as to a portion of a proposed settlement, the party controlling the tax contest can enter into a settlement
without the consent of the other party and will forgo its right to any contributing tax payments from the non-settling party with respect to the disputed portion of such settlement amount.

Dispute Resolution

Under the proposed tax sharing agreement, any other disputes between the parties with respect to the proposed tax sharing agreement will be resolved by a
nationally recognized accounting firm that is jointly retained by VHIC and Activision Blizzard and mutually agreeable to both parties.

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BOARD AND MANAGEMENT OF ACTIVISION BLIZZARD

This section of the document describes the material board and management arrangements that will apply to Activision Blizzard upon completion of the transaction.

Board of Directors

After completion of the transaction, the Activision Blizzard board of directors will consist of eleven (11) directors. Prior to the first occurrence of a
Triggering Event and subject to applicable law or stock exchange listing rules, the Activision Blizzard board of directors will include six (6) Vivendi designees,
Messrs. Robert A. Kotick and Brian G. Kelly who will serve in the capacity of executive directors, and three (3) independent directors.

We
currently anticipate that the following individuals will serve on the initial Activision Blizzard board of directors following completion of the transaction:

Name

Age

Business Experience, Public Company Directorships Held

Robert A. Kotick

44

Director; President and Chief Executive Officer of Activision Blizzard. Mr. Kotick has been a member of the board of directors as well as Chairman and Chief Executive Officer of Activision
since February 1991. Since March 2003, Mr. Kotick has served on the board of directors of Yahoo! Inc., an Internet content and service provider, and is a member of that board's nominating and corporate governance committee. He is also a
member of the Board of Trustees for The Center for Early Education and is Chairman of the Committee of Trustees at the Los Angeles County Museum of Art.

Brian G. Kelly

45

Co-Chairman of Activision Blizzard. Mr. Kelly has held various positions of responsibility with Activision since 1991, including serving as a director of Activision since July 1995 and
as Co-Chairman of Activision since October 1998. Mr. Kelly holds a B.A. degree in accounting from Rutgers University and a J.D. degree from Fordham University School of Law.

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Robert J. Corti

58

Director. Mr. Corti has been a director of Activision since December 2003 and currently serves as chairperson of the Audit Committee. Mr. Corti has more than 25 years of
experience at Avon Products, Inc., a global manufacturer and marketer of beauty and related products. Mr. Corti joined Avon Products, Inc.'s tax department as a tax associate in 1976 and held positions of increasing responsibility in
Avon Products, Inc.'s finance department throughout his tenure there. He served as the Executive Vice President and Chief Financial Officer of Avon Products, Inc. from 1998 until he retired from his positions as Chief Financial Officer in
November 2005 and Executive Vice President in March 2006. Since June 2006, Mr. Corti has served on the board of directors of Bacardi Limited, a wine and spirits group, and since January 2008, on the board of directors or ING Direct, a U.S.
subsidiary of ING Group. Mr. Corti also serves as Chairman of the board of directors of the Avon Products Foundation. Mr. Corti holds a B.A. degree in Accounting from Queens College and an M.B.A. degree in Taxation from St. John's
University. Mr. Corti is also a certified public accountant.

Robert J. Morgado

65

Director. Mr. Morgado has been a director of Activision since February 1997 and currently serves as chairperson of both the Compensation Committee and the Nominating/Corporate
Governance Committee. Mr. Morgado is Chairman of Maroley Media Group, a media entertainment investment company he established in 1995. He previously served as Chairman and Chief Executive Officer of the Warner Music Group, Inc. from 1985 to
1995. Mr. Morgado serves on the boards of directors of the Maui Arts & Cultural Center and New Milford Hospital in Connecticut. He is also a member of the board of managers of Nest Top, LLC, the controlling shareholder of Nest
Family and Nest Learning Systems, a children's entertainment company. Mr. Morgado holds a B.A. degree from Chaminade University of Honolulu and an M.P.A. degree from The State University of New York.

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Richard Sarnoff

49

Director. Mr. Sarnoff has been a director of Activision since August 2005, and is employed by Bertelsmann AG, a diversified media and services company. Mr. Sarnoff serves as
Executive Vice President of Random House, Inc., and as President of Bertelsmann Digital Media Investments (formerly Random House Ventures.) Mr. Sarnoff became a member of the Supervisory Board of Bertelsmann AG, the parent company of Random
House, Inc., in 2002. Previously, Mr. Sarnoff served as Executive Vice President and Chief Financial Officer of Random House, Inc. Mr. Sarnoff also currently serves on the Board of Directors of Audible (NASDAQ: ADBL), The
Princeton Review, Inc. (NASDAQ: REVU), and is currently Chairman of the Board of the American Association of Publishers. Mr. Sarnoff holds a B.A. degree from Princeton University and an M.B.A. degree from Harvard Business
School.

Jean-Bernard Lévy

52

Director. Mr. Lévy has served as the Chairman of Vivendi's Management Board since April 2005. From August 2002 until April 2005, Mr. Lévy was Chief Operating Officer
of Vivendi. Mr. Lévy currently serves as the Vice-Chairman of the Supervisory Board of Maroc Telecom and as the Chairman of the Supervisory Board of Canal+ France and Viroxis. Mr. Lévy is also a member of the Supervisory Board
of Canal+ Group and a director of SFR, Vivendi Games Inc., NBC Universal Inc and Vinci and l'Institut Pasteur. Mr. Lévy previously served as Chairman and Chief Executive Officer of VU Net and VTI and as a director of UGC, Cegetel,
Oddo Pinatton Group and HCA. Mr. Lévy is a graduate of the École Polytechnique and the École Nationale Supérieure des
Télécommunications.

René Pénisson

65

Chairman of Activision Blizzard. Mr. Pénisson has served as a Member of Vivendi's Management Board since April 2005 and as Chairman of Vivendi Games since January 2004.
Mr. Pénisson has also served as Senior Executive Vice-President, Human Resources, of Vivendi since April 2004. Prior to these positions, Mr. Pénisson served as adviser to the Chairman and Chief Executive Officer, Social
Relations and Organization of Vivendi beginning in September 2002. Mr. Pénisson previously served as a member of the Executive Committee of Aventis and as Chairman of the Boards of Aventis Animal Nutrition and RP Industrialisation.
Mr. Pénisson graduated from the École Supérieure de Chimie in Lyon with an engineering degree. He holds a doctorate in engineering from the Université de Lyon and a degree from the French Management Institute.

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Bruce L. Hack

58

Vice-Chairman and Chief Corporate Officer of Activision Blizzard. Mr. Hack has been Vivendi Games' Chief Executive Officer and served on Vivendi Games' board of directors since January
2004. Mr. Hack was previously Executive Vice PresidentStrategy and Development for Vivendi, during which time he was a key negotiator in the $14 billion sale of Vivendi's film and television business (Universal Studios) to NBC. From
1998 to 2001 Mr. Hack was Vice Chairman of Universal Music Group, and from 1995 to 1998 he served as Executive Vice President and Chief Financial Officer of Universal Studios. From 1982 through 1994 Mr. Hack held various positions of
responsibility with what was then the Seagram Company Ltd., including Chief Financial Officer of Tropicana Products, Inc. Mr. Hack joined Seagram after serving as a trade negotiator at the U.S. Treasury in Washington, D.C.
Mr. Hack earned a B.A. from Cornell University and an M.B.A. from the University of Chicago.

Douglas Morris

69

Director. Mr. Morris has served on Vivendi's Management Board since April 2005. Mr. Morris is currently the Chairman and Chief Executive Officer of Universal Music Group, a
position he has held since November 1995. Mr. Morris also currently serves on the Board of Directors of the Robin Hood Foundation, the Cold Spring Harbor Laboratory, and the Rock and Roll Hall of Fame, in addition to serving as a director for
various Universal Music Group subsidiaries. Mr. Morris is a graduate of Columbia University.

Philippe Capron

49

Director. Mr. Capron has served as Chief Financial Officer and as a Member of the Management Board of Vivendi since April 2007. He joined Vivendi as Executive Vice-President in January
2007. Mr. Capron is also a member of the Supervisory Boards of Canal+ Group, Canal+ France and Maroc Telecom and a director of Vivendi Games, Inc. From 2006 until 2007, Mr. Capron served as Executive Vice-President Finance and as a
Member of the Management Board of the Arcelor Group. From 2002 until 2006 Mr. Capron was Executive Vice-President of Arcelor. Mr. Capron is a graduate of the Ecole des Hautes Etudes Commerciales, the Institut d'Etudes Politiques de Paris and the Ecole Nationale d'Administration.

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Frédéric Crépin

38

Director. Mr. Crépin has served as Senior Vice-President, Head of Legal Department of Vivendi since August 2005. Mr. Crépin joined Vivendi's office of the General
Counsel and Legal Department in July 2000. Prior to joining Vivendi, Mr. Crépin served as an associate at several law firms in both Paris and New York. Mr. Crépin is a member of both the Paris and the New York bars, and is a
graduate of the Institut d'Etudes Politiques de Paris. Mr. Crépin holds an LL.M. degree from New York University School of Law, a Masters Degree in European business law from the Université Paris II Panthéon-Assas and a Masters Degree in employment and labor law from the Université Paris X Nanterre.

Resignation; Removal; Vacancies

Under the post-closing bylaws, a director may resign his office at any time, and any director may be removed from office with or without cause at any
time by the affirmative vote of stockholders holding of record in the aggregate at least a majority of the outstanding shares of Activision Blizzard stock, given at a special meeting of Activision
Blizzard stockholders called for that purpose.

Under
the post-closing bylaws, vacancies on the Activision Blizzard board of directors may generally only be filled by the affirmative vote of a majority of the remaining
directors then in office, although fewer than a quorum, or by the sole remaining directors. However, prior to the first occurrence of a Termination Event:



a
vacancy created by the resignation, death or removal of a Vivendi designee may only be filled by the affirmative vote of a majority of the directors on the Vivendi
nominating committee; and



a
vacancy created by the resignation, death or removal of an independent director may only be filled by the unanimous vote of the directors on the executive nominating
committee.

In
addition, prior to the first occurrence of a Triggering Event, a vacancy created by the resignation, death or removal of an executive director may only be filled by the unanimous vote
of the directors on the executive nominating committee. See the section entitled "Corporate Governance of Activision BlizzardActivision Blizzard Board of DirectorsCommittees
of the Activision Blizzard Board of Directors" for a description of the committees and their composition.

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Executive Management

Activision and Vivendi Games have agreed that, upon completion of the transaction, the following persons will hold the officer positions set forth opposite their
names:

Name

Age

Office and Business Experience

René Pénisson

65

Chairman of Activision Blizzard. Mr. Pénisson has served as a Member of Vivendi's Management Board since April 2005 and as Chairman of Vivendi Games since January 2004.
Mr. Pénisson has also served as Senior Executive Vice-President, Human Resources, of Vivendi since April 2004. Prior to these positions, Mr. Pénisson served as adviser to the Chairman and Chief Executive Officer, Social
Relations and Organization of Vivendi beginning in September 2002. Mr. Pénisson previously served as a member of the Executive Committee of Aventis and as Chairman of the Boards of Aventis Animal Nutrition and RP Industrialisation.
Mr. Pénisson graduated from the École Supérieure de Chimie in Lyon with an engineering degree. He holds a doctorate in engineering from the Université de Lyon and a degree from the French Management Institute.

Robert A. Kotick

44

President and Chief Executive Officer of Activision Blizzard. Mr. Kotick has been a member of the board of directors as well as Chairman and Chief Executive Officer of Activision since
February 1991. Since March 2003, Mr. Kotick has served on the board of directors of Yahoo! Inc., an Internet content and service provider, and is a member of that board's nominating and corporate governance committee. He is also a member of
the Board of Trustees for The Center for Early Education and is Chairman of the Committee of Trustees at the Los Angeles County Museum of Art.

Brian G. Kelly

45

Co-Chairman of Activision Blizzard. Mr. Kelly has held various positions of responsibility with Activision since 1991, including serving as a director of Activision since July 1995 and
as Co-Chairman of Activision since October 1998. Mr. Kelly holds a B.A. degree in accounting from Rutgers University and a J.D. degree from Fordham University School of Law.

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Bruce L. Hack

58

Vice-Chairman and Chief Corporate Officer of Activision Blizzard. Mr. Hack has been Vivendi Games' Chief Executive Officer and served on Vivendi Games' board of directors since January
2004. Mr. Hack was previously Executive Vice PresidentStrategy and Development for Vivendi, during which time he was a key negotiator in the $14 billion sale of Vivendi's film and television business (Universal Studios) to NBC. From
1998 to 2001 Mr. Hack was Vice Chairman of Universal Music Group, and from 1995 to 1998 he served as Executive Vice President and Chief Financial Officer of Universal Studios. From 1982 through 1994 Mr. Hack held various positions of
responsibility with what was then the Seagram Company Ltd., including Chief Financial Officer of Tropicana Products, Inc. Mr. Hack joined Seagram after serving as a trade negotiator at the U.S. Treasury in Washington, D.C.
Mr. Hack earned a B.A. from Cornell University and an M.B.A. from the University of Chicago.

Michael J. Griffith

51

President and Chief Executive Officer of Activision Publishing, Inc. Mr. Griffith has been President and Chief Executive Officer of Activision Publishing and Principal Executive
Officer of Activision Inc. since June 2005. Prior to joining Activision, Mr. Griffith served in a number of executive level positions at The Procter & Gamble Company, a manufacturer of consumer goods products, from 1981 to 2005,
including President of The Procter & Gamble Company's Global Beverage Division from 2002 to 2005, Vice President and General Manager, Coffee Products from 1999 to 2002 and Vice President and General Manager of Fabric & Home
CareJapan and Korea and Fabric & Home Care Strategic PlanningAsia for The Procter & Gamble Company from 1997 to 1999. Mr. Griffith holds a B.A. degree from Albion College and an M.B.A. degree from the University of
Michigan.

Michael Morhaime

40

President and Chief Executive Officer of Blizzard Entertainment. Mr. Morhaime co-founded Blizzard Entertainment in February 1991 and transitioned to the role of President from Vice
President in April 1998. Mr. Morhaime has served on the Vivendi Games executive committee since January 1999, when Blizzard Entertainment became a subsidiary of Vivendi Games. Mr. Morhaime holds a Bachelor of Science degree in electrical
engineering from the University of California at Los Angeles.

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Thomas Tippl

41

Chief Financial Officer of Activision Blizzard. Mr. Tippl has been Chief Financial Officer of Activision Publishing since October 2005 and Principal Financial and Accounting Officer of
Activision since January 2006. Prior to joining Activision, Mr. Tippl served as Head of Investor Relations and Shareholder Services at The Procter & Gamble Company from 2004 to 2005. Mr. Tippl also served as Finance Director of The
Procter & Gamble Company, Baby Care, Europe and as a member of the board of directors of The Procter and Gamble Company's Fater Italy Joint Venture from 2001 to 2003. Mr. Tippl co-founded The Procter & Gamble Company's Equity
Venture Fund in 1999 and also served as Associate Director of Acquisitions and Divestitures for The Procter and Gamble Company from 1999 to 2001. Prior to 1999, Mr. Tippl served in various financial executive positions for The Procter and Gamble
Company in Europe, China and Japan. Mr. Tippl holds a Masters degree in Economics & Social Sciences from the Vienna University of Economics and Business Administration.

Jean-François Grollemund

63

Chief Accounting Officer of Activision Blizzard. Mr. Grollemund has been Vivendi Games' Executive Vice President and Chief Financial Officer, and served on Vivendi Games' board of
directors since January 2004. Prior to that, Mr. Grollemund was Chief Operating Officer of VU Net (Europe & USA) and served as Chief Operating Officer and Chief Financial Officer in many positions for Vivendi Universal's Publishing
Division in France and Latin America. Mr. Grollemund graduated from the Institut d'Études Politiques de Paris, and received a DESS in Law and Economic Science from the University Panthéon Sorbonne.

Management Employment Agreements

As previously disclosed, on December 1, 2007, Activision entered into an amended and restated employment agreement with Mr. Robert A. Kotick,
pursuant to which Mr. Kotick will serve as President and Chief Executive Officer of Activision. The employment agreement with Mr. Kotick is referred to in this proxy statement as the
"Kotick employment agreement." Also, as previously disclosed, on December 1, 2007, Activision entered into an amended and restated employment agreement with Mr. Brian G. Kelly,
pursuant to which Mr. Kelly will serve as Co-Chairman of Activision. The employment agreement with Mr. Kelly is referred to in this proxy statement as the "Kelly employment
agreement."

Both
the Kotick employment agreement and the Kelly employment agreement supersede and replace the existing employment agreements between Activision and each of Messrs. Kotick and
Kelly, specifically the prior employment agreements with each of them dated May 22, 2000, which were scheduled to expire on March 31, 2008. Pursuant to the amended and restated
employment agreements, each of Messrs. Kotick and Kelly have agreed to waive, in connection with the transaction,

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certain
benefits they would have been entitled to receive under the prior employment agreements. The waived benefits include the right to (a) elect to receive a cash payment in respect of all
stock options held by Messrs. Kotick and Kelly equal to, as to each share of Activision common stock subject to such stock options, the excess of the closing price of Activision common stock on
the date of the transaction over the option exercise price, (b) accelerated vesting on the date of the transaction of unvested stock options granted in June 2007, and (c) resign for any
reason during the six-month period following the three-month anniversary of the transaction and receive severance of five times the sum of their base salary and most recent annual bonus,
as well as a pro-rata annual bonus for the year of resignation and two years of health insurance continuation.

Replacement Bonus Agreements

Messrs. Kotick's and Kelly's prior employment agreements provided for the payment of certain benefits upon a change of control of Activision. On
December 29, 2006, these agreements were amended to remove certain of those benefits that may have imposed adverse tax consequences on Messrs. Kotick and Kelly under Section 409A
of the Internal Revenue Code. In connection with these amendments, the parties agreed to negotiate in good faith to develop benefits reasonably comparable to those forgone by Messrs. Kotick and
Kelly under their prior employment agreements.

As
a result of those negotiations, on December 1, 2007, Activision entered into replacement bonus agreements with each of Messrs. Kotick and Kelly. These agreements provide
that each of Messrs. Kotick and Kelly will receive two cash bonuses and a grant of RSUs. The first cash bonus of $5,000,000 was paid in a cash lump sum on December 28, 2007. The second
cash bonus of $5,000,000 will be paid in a cash lump sum on the closing date so long as the closing date occurs on or before June 30, 2009 and each of Messrs. Kotick and Kelly is
continuously employed through the closing date.

In
addition, each of Messrs. Kotick and Kelly will receive a grant of 363,637 RSUs on the closing date so long as the closing date occurs on or before June 30, 2009 and
they are continuously employed through the closing date. The RSUs for Mr. Kotick will vest in three equal annual installments on December 31, 2008, December 31, 2009 and
December 31, 2010. The RSUs for Mr. Kelly will vest in full on December 31, 2010. In the event that either Mr. Kotick or Mr. Kelly resigns or is terminated for any
reason other than for cause (as defined in the Kotick and Kelly employment agreements), the vesting of all unvested RSUs will accelerate. RSUs will be settled in shares of common stock within thirty
days following the date on which they vest.

Kotick Employment Agreement

The Kotick employment agreement became effective on December 1, 2007 and will expire on December 31, 2012. During the term of the Kotick employment
agreement, Mr. Kotick will be entitled to an annual base salary of $950,000, with annual increases equal to the average percentage increase approved by the compensation committee of the
Activision board of directors for members of the executive leadership team, excluding any increases guaranteed by contract or due to an executive's significant promotion or modification in duties.
Additionally, Mr. Kotick will be eligible to receive an annual bonus under Activision's 2007 Incentive Plan, with a target amount of 200% of his base salary based upon achievement of certain
financial and business objectives determined by the compensation committee. Mr. Kotick will also be eligible to participate in all benefit and perquisite plans, programs and arrangements
generally made available to Activision's executives. In addition, for a period of ten years following the effective date of the Kotick employment agreement, Activision will provide Mr. Kotick
with a life insurance policy having a death benefit equal to three times Mr. Kotick's salary and target annual bonus as of December 1, 2007.

Pursuant
to the amended and restated employment agreement, on December 5, 2007, the third business day following the compensation committee's approval of the Kotick employment
agreement,

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Mr. Kotick
received a grant of 1,850,000 non-qualified stock options to purchase shares of Activision common stock. These new options have an exercise price equal to $26.58 and will
vest in sixty equal monthly installments commencing on January 1, 2008.

On
the closing date, Mr. Kotick will receive a grant of 1,250,000 performance shares, which will vest in 20% increments on each of the first, second, third and fourth
anniversaries of the closing date, with another 20% vesting on December 31, 2012, the expiration date of the Kotick employment agreement, in each case subject to Activision attaining the
specified compound annual total shareholder return target for that vesting period. If Activision does not achieve the performance target for a vesting period, none of Mr. Kotick's performance
shares mentioned above will vest for that vesting period. If, however, Activision achieves a performance target for a subsequent vesting period, then all of such performance shares that would have
vested on the previous vesting date will vest on the vesting date where the performance targets were achieved.

The
Kotick employment agreement also entitles Mr. Kotick to severance benefits upon his termination of employment depending on the reason for termination. In the event
Mr. Kotick's employment is terminated by Activision without cause, or he resigns his employment for good reason (each as defined in the Kotick employment agreement), other than during the
12-month period following a change of control (as defined in the Kotick employment agreement), he will receive (a) two times his base salary and target annual bonus for the year of
termination of employment, (b) a pro-rata annual bonus for the year of his termination of employment, (c) two years of
medical benefit continuation, (d) accelerated vesting of all outstanding options granted on or prior to June 15, 2007, (e) accelerated vesting of 40% of the new options (or the
remaining unvested options, if less than 40%), and (f) vesting of a portion of the performance shares. If Mr. Kotick's employment is terminated on account of his disability (as defined
in the Kotick employment agreement), he will receive one times his base salary and the benefits described in clauses (b), (c) and (d) above. Upon Mr. Kotick's resignation
with good reason or termination for cause, he will not be eligible to receive additional severance benefits.

Upon
a change of control of Activision following consummation of the transaction, Mr. Kotick is entitled to (a) accelerated vesting of all outstanding options granted prior
to January 1, 2007, (b) accelerated vesting of 20% of the options granted on June 15, 2007, and (c) accelerated vesting of the new options and the performance shares as
follows: (w) 60% of the total number of new options and performance shares if the change of control occurs prior to January 1, 2009, (x) 40% of the total number of new options and
performance shares if the change of control occurs during calendar year 2009, (y) 20% of the total number of new options and performance shares if the change of control occurs during calendar
year 2010, and (z) up to 100% of the total number of new options and performance shares if the change of control occurs during calendar year 2011 or 2012. Mr. Kotick will also be
entitled to a gross-up payment for any excise taxes imposed on him under Section 4999 of the Internal Revenue Code. Moreover, if Mr. Kotick's employment is terminated during
the 12-month period following a change of control by Activision without cause, or by Mr. Kotick for good reason, he will be entitled to (a) three times his base salary and
bonus, (b) a pro rata annual bonus for the year of termination and (c) two years of medical benefit continuation. Finally, if Mr. Kotick's employment is terminated following a
change of control which occurs prior to January 1, 2011 either on account of his disability, by Activision without cause or by Mr. Kotick for good reason, the amount of severance will be
reduced by the value of any new options and performance shares accelerated in connection with the change of control in excess of $25 million.

Mr. Kotick
is subject to Activision's standard proprietary information agreement. In addition, for a period of two years following the termination of his employment,
Mr. Kotick will be prevented from soliciting employees of Activision and from utilizing confidential and proprietary information to solicit customers, employees and other Activision affiliates.

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Kelly Employment Agreement

The Kelly employment agreement became effective on December 1, 2007 and will expire on March 31, 2011. Through March 31, 2008,
Mr. Kelly will continue to receive a base salary of $876,920. Beginning on April 1, 2008 and for the duration of the term of the Kelly employment agreement, Mr. Kelly will be
entitled to a reduced annual base salary of $450,000, with annual increases at the discretion of the
compensation committee of the Activision board of directors. For fiscal year 2008, Mr. Kelly will be eligible for an annual bonus under Activision's existing Executive Bonus Plan. Thereafter,
Mr. Kelly is not entitled to an annual bonus unless otherwise determined by the compensation committee in its sole discretion. Mr. Kelly will also participate in all benefit and
perquisite plans, programs and arrangements generally made available to Activision's executives. In addition, for the duration of the term of the Kelly employment agreement, Activision will provide
Mr. Kelly with a life insurance policy having a death benefit equal to $6,000,000.

The
Kelly employment agreement entitles Mr. Kelly to severance benefits upon his termination of employment depending on the reason for termination. In the event Mr. Kelly's
employment is terminated by Activision without cause, or he resigns his employment for good reason (each as defined in the Kelly employment agreement), he will receive (a) three times the
average annual base salary and bonus paid to him for the three most recent fiscal years, (b) a pro-rata annual bonus for the year of his termination of employment, (c) two
years of medical benefit continuation, and (d) accelerated vesting of all outstanding options granted on or prior to June 15, 2007. If Mr. Kelly's employment is terminated on
account of his disability (as defined in the Kelly employment agreement), he will receive one times his average base salary for the three most recent fiscal years and the benefits described in
clauses (b), (c) and (d) above. If the good reason event is Activision failing to renew the Kelly employment agreement on similar terms and conditions at the end of the term, the
severance amount in clause (a) will be reduced to "two times" the average annual base salary and bonus paid to him for the three most recent fiscal years.

Upon
a change of control of Activision following the consummation of the transaction, Mr. Kelly is entitled to (a) accelerated vesting of all outstanding options granted
prior to January 1, 2007 and (b) accelerated vesting of 20% of the options granted on June 15, 2007. Mr. Kelly will also be entitled to a gross-up payment for
any excise taxes imposed on him under Section 4999 of the Internal Revenue Code.

For
a period of one year following the termination of his employment, Mr. Kelly will be prevented from (a) competing with Activision, (b) soliciting employees of
Activision and (c) utilizing confidential and proprietary information to solicit customers, employees and other Activision affiliates. Moreover, Mr. Kelly remains subject to Activision's
standard proprietary information agreement.

Griffith Employment Agreement Amendment

Michael Griffith currently serves as President and Chief Executive Officer of Activision Publishing pursuant to an employment agreement, which we refer to as the
Griffith employment agreement. As previously disclosed, on December 1, 2007, Activision entered into an amendment to the Griffith employment agreement to provide additional incentives for
Mr. Griffith to remain employed by Activision Publishing following the completion of the transaction. The amendment to the Griffith employment agreement becomes effective upon completion of the
transaction.

The
amendment to the Griffith employment agreement provides that, on the closing date, Mr. Griffith will receive 50,000 stock options and 50,000 RSUs. The stock options will vest
in three equal annual installments on each of the first, second and third anniversaries of the closing. The RSUs will vest in full on June 30, 2010.

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In
addition, the amendment modifies the vesting provisions of certain equity awards previously granted to Mr. Griffith to reduce the vesting term by one year. Under his employment
agreement, Mr. Griffith had received 1,000,000 stock options under the Company's 2003 Incentive Plan, which were granted in three tranches. The first tranche consisted of 350,000 stock options,
which were to vest ratably over five years beginning on June 15, 2006. The amendment provides that these stock options will now vest in four installments as follows: 20% on June 15,
2006, 20% on June 15, 2007, 20% on June 15, 2008 and 40% on June 15, 2009. The second tranche consisted of 350,000 stock options, which were to vest in full on June 15,
2010, subject to possible earlier vesting if Mr. Griffith attained certain performance objectives. The amendment provides that these stock options will now vest in full on June 15, 2009,
subject to possible earlier vesting if Mr. Griffith attains certain performance objectives. The third tranche consisted of 300,000 stock options, which were to vest in full on June 15,
2010. The amendment provides that these options will now vest in full on June 15, 2009.

Pursuant
to his employment agreement, Mr. Griffith also received a grant of RSUs, which were to vest in three equal annual installments on June 15, 2008, June 15,
2009 and June 15, 2010. The amendment provides that the RSUs will now vest in two installments, with one third (1/3) of the shares to vest on June 15, 2008, and
two-thirds (2/3) of the shares to vest on June 15, 2009.

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CORPORATE GOVERNANCE OF ACTIVISION BLIZZARD

The following section summarizes the material provisions of the post-closing certificate of incorporation and the
post-closing bylaws. Upon closing of the transaction and assuming approval of the charter amendment proposal and the bylaw amendment proposal by Activision stockholders, Activision's
certificate of incorporation and bylaws will be amended and restated in their entirety. Copies of the post-closing certificate of incorporation and the post-closing bylaws are
attached as Annexes B and C, respectively, to this proxy statement, and are incorporated herein by reference.

The following summary may not contain all of the information about the post-closing certificate of incorporation and the post-closing
bylaws that may be important to you and is qualified in its entirety by reference to the complete text of the post-closing certificate of incorporation and the post-closing
bylaws. We encourage you to read the post-closing certificate of incorporation and the post-closing bylaws carefully and in their entirety for a more complete understanding of
these documents.

Corporate Name

The combined company's corporate name will be "Activision Blizzard, Inc."

Fiscal Year

The fiscal year of the combined company will end on December 31.

Capital Stock

The total number of shares of capital stock that Activision Blizzard will have the authority to issue under the post-closing certificate of
incorporation is one billion two hundred five million (1,205,000,000) shares, of which (a) one billion two hundred million (1,200,000,000) shares will be designated common stock, par value
$0.000001 per share, and (b) five million (5,000,000) shares will be designated preferred stock.

Activision Blizzard Board of Directors

Size of the Activision Blizzard Board of Directors

After completion of the transaction, the Activision Blizzard board of directors will consist of eleven (11) directors.

Composition of the Activision Blizzard Board of Directors

Prior to the first occurrence of a Triggering Event, the members of the Activision Blizzard board of directors will include:



six
(6) directors designated by Vivendi (these directors are referred to in this proxy statement, collectively, as "Vivendi designees");



two
(2) Activision management directors (these directors are referred to in this proxy statement, collectively, as "executive directors"); and



three
(3) directors who currently serve on Activision's board of directors and who qualify as "independent directors" pursuant to Rule 4200(15) of the NASDAQ
Marketplace Rules (these directors are referred to in this proxy statement, collectively, as "independent directors").

If,
at any time prior to the first occurrence of a Triggering Event while Activision Blizzard's securities are listed on NASDAQ or any other U.S. stock exchange, applicable law or
listing rules require a greater number of independent directors, the size of the Activision Blizzard board of directors will be increased to add (a) the number of additional required
independent directors, and

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(b) a
number of additional Vivendi designees such that at least a majority of the directors will be Vivendi designees.

Following
the first occurrence of a Triggering Event, but prior to the first occurrence of a Termination Event, (a) the Activision Blizzard board of directors will include a
number of Vivendi designees that is proportional to the Vivendi Voting Interest, and (b) the Vivendi nominating committee (as described below in the section entitled "Corporate Governance of
Activision Blizzard Activision Blizzard Board of DirectorsCommittees of the Activision Blizzard Board of Directors") will be entitled to nominate individuals for the Vivendi
designees; provided that if, at any time while Activision Blizzard's securities are listed on NASDAQ or any other U.S. stock exchange, applicable law or listing rules require that at least a majority
of the Activision Blizzard board of directors be "independent" as defined by such law or listing rules, then (x) the size of the Activision Blizzard board of directors will be increased to add
the number of additional independent directors to satisfy such law or listing rules, and (y) such vacancies will be filled by individuals nominated by the Vivendi designees and appointed by the
affirmative vote of a majority of the directors then in office.

Classification of the Activision Blizzard Board of Directors

Activision Blizzard will have one class of directors.

Committees of the Activision Blizzard Board of Directors

The Activision Blizzard board of directors will have three standing committees: (a) an audit committee, (b) a compensation committee, and
(c) a nominating and corporate governance committee. In addition
to the three standing committees, the Activision Blizzard board of directors will establish three (3) subcommittees of the nominating and corporate governance committee:



a
Vivendi nominating committee, which will be maintained until the first occurrence of a Termination Event and will be comprised solely of Vivendi designees;



an
independent nominating committee, which will be maintained until the first occurrence of a Termination Event and will be comprised solely of independent directors; and



an
executive nominating committee, which will be maintained until the first occurrence of a Triggering Event and will be comprised of two (2) Vivendi designees and
two (2) independent directors.

The
three subcommittees of the Activision Blizzard nominating and corporate governance committee are referred to in this proxy statement, collectively, as "special nominating
committees."

All
committees of the Activision Blizzard board of directors (other than the special nominating committees and the audit committee) will:



prior
to the first occurrence of a Triggering Event, (a) have at least a majority of Vivendi designees, and (b) include at least one (1) independent
director; and



following
the first occurrence of a Triggering Event and prior to the first occurrence of a Termination Event, include at least a number of Vivendi designees that is
proportional to the Vivendi Voting Interest, rounded up to the nearest whole number.

Controlled Company Exemption

Following completion of the transaction, we expect that Activision Blizzard will qualify as a "controlled company," as that term is defined by Rule 4350(c)
of the NASDAQ Marketplace Rules. A controlled company is a company of which more than 50% of the voting power is held by an individual, group or another company. Immediately after the completion of
transaction, Vivendi and its subsidiaries will collectively own more than 50% of the voting power of the outstanding common stock

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of
Activision Blizzard. Accordingly, we believe that Activision Blizzard will be exempt from the requirements of Rule 4350(c) of the NASDAQ Marketplace Rules that would otherwise require
Activision Blizzard to have:



a
majority of independent directors;



a
compensation committee composed solely of independent directors;



compensation
of Activision Blizzard's executive officers determined by a majority of independent directors or a compensation committee composed solely of independent
directors;



a
nominating committee composed solely of independent directors; and



director
nominees selected, or recommended for the board of directors' selection, either by a majority of the independent directors or a nominating committee composed solely
of independent directors.

Quorum for Meetings of the Activision Blizzard Board of Directors

Prior to the first occurrence of a Triggering Event, the presence in person of a number of directors equal to a majority of the total number of directors plus one
(1) will constitute a quorum for meetings of the Activision Blizzard board of directors. If a quorum is not obtained at a meeting of the Activision Blizzard board of directors solely because
none of the executive directors or independent directors was present at such meeting, then, for purposes of the next meeting, a quorum for such meeting solely with respect to those matters duly
noticed for the prior meeting will require the presence, in person, of a number of directors equal to a majority of the total number of directors.

Following
the first occurrence of a Triggering Event, the presence in person of a number of directors equal to a majority of the total number of directors will constitute a quorum for
meetings of the Activision Blizzard board of directors.

Acts of the Activision Blizzard Board of Directors

Prior to the first occurrence of a Triggering Event, the vote of a majority of the votes present or otherwise able to be cast will constitute an act of the
Activision Blizzard board of directors.

Following
the first occurrence of a Triggering Event, the vote of a majority of the directors present will constitute an act of the Activision Blizzard board of directors.

Voting Power of Vivendi Designees

Prior to the first occurrence of a Triggering Event, at each meeting of the Activision Blizzard board of directors or any committee of the Activision Blizzard
board of directors (other than the special nominating committees and the audit committee), each Vivendi designee who is not an employee of Activision Blizzard or any of Activision Blizzard's
subsidiaries and who is present at such meeting will be entitled to cast a number of votes equal to the quotient of (a) the sum of (x) the total number of Vivendi designees who are not
employees of Activision Blizzard or any of Activision Blizzard's subsidiaries and who serve on the Activision Blizzard board of directors or any committee thereof and who are not present at such
meeting plus (y) the total number of Vivendi designees (other than Vivendi designees who are not employees of Activision Blizzard or any of Activision Blizzard's subsidiaries) who
serve on the Activision Blizzard board of directors or any committee thereof and who are not present at such meeting, divided by (b) the total number of Vivendi designees who are not employees
of Activision Blizzard or any of Activision Blizzard's subsidiaries and who are present at such meeting.

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Vacancies on the Activision Blizzard Board of Directors

In general, vacancies on the Activision Blizzard board of directors may only be filled by the affirmative vote of a majority of the remaining directors then in
office, although fewer than a quorum, or by the sole remaining director. However, prior to the first occurrence of a Termination Event:



a
vacancy created by the resignation, death or removal of a Vivendi designee may only be filled through the affirmative vote of a majority of the directors on the Vivendi
nominating committee; and



a
vacancy created by the resignation, death or removal of an independent director may only be filled through the affirmative vote of a majority of the directors on the
independent nominating committee.

In
addition, prior to the first occurrence of a Triggering Event, a vacancy created by the resignation, death or removal of an executive director may only be filled by the unanimous vote
of the directors on the executive nominating committee.

Approval of Certain Matters by Activision Blizzard Board of Directors

Prior to the fifth anniversary of the closing date, the approval of certain matters by the Activision Blizzard board of directors will require the affirmative
vote of (a) a majority of the votes present or otherwise able to be cast, and (b) at least a majority of the independent directors.

These
matters include:



the
declaration and payment of any dividend on Activision Blizzard's capital stock, provided that after the first anniversary of the closing date, this restriction will not
apply if Activision Blizzard's pro forma net debt amount, after giving effect to such dividend, does not exceed $400 million;



changing
Activision Blizzard's state of incorporation;



any
transaction or agreement between Activision Blizzard or any of its subsidiaries, on the one hand, and Vivendi or any of Vivendi's controlled affiliates, on the other
hand;



waiver
of the provisions of Section 203 of the DGCL with respect to any transaction involving Vivendi or any of Vivendi's controlled affiliates;



any
change in Activision Blizzard's corporate name;



any
relocation of Activision Blizzard's headquarters or principal offices to any location not in the Los Angeles, California area;



subject
to certain limited exceptions, the creation of any committee of the Activision Blizzard board of directors;



prior
to the first occurrence of a Triggering Event, any increase in the size of the Activision Blizzard board of directors, except as otherwise required pursuant to the
provisions relating to the composition of the Activision Blizzard board of directors outlined above; or



the
appointment or election of Activision Blizzard's chief financial officer.

Prior
to January 1, 2011 (or the third (3rd) anniversary of the closing date if the transaction closes after March 31, 2008), the affirmative vote of
(a) a majority of the votes present or otherwise able to be cast, and (b) at least a majority of the independent directors will be required for:



the
termination, with or without cause, of Activision Blizzard's chief executive officer; or

127



in
the event Activision Blizzard's chief executive officer resigns for "good reason" (as defined in the chief executive officer's employment agreement), the appointment or
election of a new chief executive officer.

Matters Relating to Activision Blizzard Stockholders

Special Meetings of Activision Blizzard Stockholders

Special meetings of Activision Blizzard stockholders may only be called by the Activision Blizzard board of directors pursuant to a resolution approved by a
majority of the directors then in office. Stockholders of Activision Blizzard are not permitted to call a special meeting or to require that the Activision Blizzard board of directors call a special
meeting of stockholders.

Advance Notice Requirement for Stockholder Proposals

In order for nominations or other business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof
in writing to Activision Blizzard's Corporate Secretary.

To
be timely, a stockholder's notice of business must be delivered to Activision Blizzard's Corporate Secretary at the principal executive offices of Activision Blizzard:



not
less than forty-five (45) nor more than seventy-five (75) days prior to the first anniversary of the date on which Activision
Blizzard first mailed its proxy materials for the previous year's annual meeting of stockholders; or



if
either (a) no proxy materials were mailed in connection with the previous year's annual meeting or (b) the date of the annual meeting is more than thirty
(30) days before or thirty (30) days after the anniversary of the previous year's annual meeting, not later than the close of business on the later of the ninetieth (90th) day before the
annual meeting or the tenth (10th) day after public announcement of the date of the annual meeting.

In
the event that the number of directors to be elected at the annual meeting is increased, and there is no public announcement naming all of the nominees for director or specifying the
size of the increased board of directors at least fifty-five (55) days prior to the first anniversary of the previous year's annual meeting, a stockholder's notice with respect to
nominees for the additional directorships will be considered timely if delivered to Activision Blizzard's Corporate Secretary at the principal executive offices of Activision Blizzard not later than
ten (10) days following the day on which such public announcement is first made.

Future Amendments to Post-Closing Bylaws

Subject to the exceptions specified below, amendments to the post-closing bylaws may made by either (a) the affirmative vote of the holders of
at least a majority of the voting power of the then outstanding shares of Activision Blizzard's capital stock entitled to vote thereon, or (b) the Activision Blizzard board of directors at any
regular or special meeting without the assent or vote of Activision Blizzard stockholders.

The
following exceptions apply:



The
affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote thereon is
required to amend bylaw provisions that protect the stockholders of Activision Blizzard, including:



Section 2.4
(Special Meetings of Stockholders);



Section 2.6(a)
(Quorum Requirements for Meetings of Stockholders);

128



Section 2.14
(Notice of Stockholder Business and Nominations); and



Section 8.4
(Amendment of Post-Closing Bylaws) as it relates to the aforementioned sections.



The
affirmative vote of the holders of more than 662/3% of the voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote
thereon is required to amend Section 3.3 (Vivendi Stockholder's Right to Proportionate Representation); and Section 8.4 (Amendment of Post-Closing Bylaws) as it relates to
the aforementioned section.



Certain
post-closing bylaw provisions protecting Vivendi or the minority stockholders may only be amended as follows: (a) prior to the first occurrence of
a Triggering Event, by the affirmative vote of (x) the holders of at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote
thereon, and (y) the holders of at least a majority of the outstanding shares of Activision Blizzard's capital stock other than shares of capital
stock owned by Vivendi and its controlled affiliated; and (b) after the first occurrence of a Triggering Event, by the affirmative vote of the holders of more than 662/3% of the
voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote thereon. These provisions include:

Section 8.4
(Amendment of Post-Closing Bylaws) as it relates to the aforementioned sections.



The
affirmative vote of the holders of (a) at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock, and (b) at
least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock other than shares of Activision Blizzard's capital stock owned by Vivendi and Vivendi's controlled
affiliates is required to amend:



Section 2.3
(Purposes of Annual Meeting; Election of Directors); and



Section 8.4
(Amendment of Post-Closing Bylaws) as it relates to the aforementioned section.



Prior
to the fifth anniversary of the closing date, Section 3.12 (Approval of Certain Matters by Activision Blizzard Board of Directors), Section 4.3 (Chief
Executive Officer) and Section 8.4 (Amendment of Post-Closing Bylaws) (as it relates to the foregoing sections) may only be amended by either:



the
separate affirmative vote of (a) a majority of the votes present or otherwise able to be cast, and (b) at least a majority of the independent directors; or



the
separate affirmative vote of the holders of (a) at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock, and
(b) at least a majority of the outstanding shares of Activision Blizzard's capital stock other than shares of Activision Blizzard's capital stock owned by Vivendi and Vivendi's controlled
affiliates.

129



In
addition to any vote required by law, the separate affirmative vote of the holders of (a) at least a majority of the shares of Activision Blizzard's capital stock,
and (b) at least a majority of the outstanding shares of Activision Blizzard's capital stock other than shares of Activision Blizzard's capital stock owned by Vivendi and Vivendi's controlled
affiliates is required to amend:



Section 3.3(b)
as to decrease the percentages in the definitions of "Triggering Event" and "Termination Event" set forth therein, or



any
of the provisions of the post-closing bylaws in a manner that would be beneficial to Vivendi and Vivendi's controlled affiliates in their capacities as
stockholders, other than amendments that affect the rights of all stockholders in the same manner.

Future Amendments to Post-Closing Certificate of Incorporation

Amendments to the post-closing certificate of incorporation may be made in accordance with Section 242 of the DGCL, except that:



The
affirmative vote of the holders of Activision Blizzard's capital stock entitled to vote thereon representing more than 662/3% of the shares entitled to be
voted thereon is required to amend:

Section 5.3(c)
(Amendment of Post-Closing Bylaws by Stockholders); and



Articles VIII
and IX, subject to the requirements specified below for the amendment of Sections 8.2, 8.3, 8.5 and 9.1(b).



Section 5.1(b)
(Quorum Requirements for Committees) and Section 5.3(a)(iii) (Amendment of Certain Post-Closing Bylaw Provisions Protecting Vivendi)
may only be amended as follows: (a) prior to the first occurrence of a Triggering Event, by the affirmative vote of (x) the holders of at least a majority of the voting power of the
outstanding shares of Activision Blizzard's capital stock entitled to vote thereon, and (y) the holders of at least a majority of the outstanding shares of Activision Blizzard's capital stock
other than shares of Activision Blizzard's capital stock owned by Vivendi and its controlled affiliated; and (b) after the first occurrence of a Triggering Event, by the affirmative vote of the
holders of more than 662/3% of the voting power of the outstanding shares of the Activision Blizzard's capital stock entitled to vote thereon.



The
affirmative vote of (a) the holders of at least a majority of the voting power of the outstanding shares of the Activision Blizzard's capital stock entitled to
vote thereon, and (b) the holders of at least a majority of the outstanding shares of Activision Blizzard's capital stock other than shares of capital stock owned by Vivendi and Vivendi's
controlled affiliates is required to amend:

Neither Vivendi nor any of Vivendi's controlled affiliates will be under an obligation to refrain from engaging in the same or similar activities or lines of
business as Activision Blizzard other than businesses conducted by Blizzard Entertainment and Sierra immediately prior to the closing; provided, however, that the businesses conducted by Vivendi and
its controlled affiliates as of the closing date will not be considered a competing business. In addition, neither Vivendi nor any of its officers or directors will be liable to Activision Blizzard or
Activision Blizzard's stockholders for breach of any fiduciary duty by reason of any such activities. In the event that Vivendi acquires knowledge of a potential corporate opportunity for both Vivendi
and Activision Blizzard, Vivendi will have no duty to communicate or offer the corporate opportunity to Activision Blizzard and will not be liable to Activision Blizzard or Activision Blizzard's
stockholders for breach of any fiduciary duty as a stockholder of Activision Blizzard by reason of the fact that Vivendi acquires or seeks the corporate opportunity for itself, directs the corporate
opportunity to another person or entity, or otherwise does not communicate information regarding the corporate opportunity to Activision Blizzard.

Fiduciary Duties of Directors

If a director or officer of Activision Blizzard who is also a director or officer of Vivendi acts in a manner consistent with the following policy with respect to
the allocation of a potential corporate opportunity for both Activision Blizzard and Vivendi about which such director acquires knowledge, he or she will have fully satisfied and fulfilled his or her
fiduciary duty to Activision Blizzard and Activision Blizzard's stockholders with respect to the corporate opportunity. A corporate opportunity for both Activision Blizzard and Vivendi offered to any
person who is an officer or director of Activision Blizzard and who is also an officer, director or employee of Vivendi, will belong to Vivendi unless such corporate opportunity was expressly offered
to such person in his or her capacity as a director or officer of Activision Blizzard.

Purchase of Activision Blizzard Stock by Vivendi

In the event that the Vivendi Voting Interest equals or exceeds 90%, either Vivendi or Activision Blizzard will, within sixty (60) days following the date
upon which the Vivendi Voting Interest first equals or exceeds 90%, commence a tender offer to acquire all shares of Activision Blizzard common stock not owned by Vivendi as of such date at a price
not less than the volume-weighted average closing price per share of Activision Blizzard common stock, as reported on NASDAQ (or, if applicable, such other national securities exchange on which
Activision Blizzard's common stock is listed), as reported by Bloomberg, L.P., for the twenty (20) consecutive trading days immediately preceding (but not including) the trading day
immediately preceding the date upon which the Vivendi Voting Interest first equals or exceeds 90%.

At
any time on or before the date upon which the Vivendi Voting Interest first equals or exceeds 90%, Vivendi may (but is not obligated to) cause Activision Blizzard to effect a merger
or other business combination pursuant to which the holders of shares of Activision Blizzard common stock not owned by Vivendi as of such date will receive, in exchange for their shares, an amount
equal to a price not less than the volume-weighted average closing price per share of Activision Blizzard common stock, as reported on NASDAQ (or, if applicable, such other national securities
exchange on which Activision Blizzard's common stock is listed), as reported by Bloomberg, L.P., for the twenty (20) consecutive trading days immediately preceding (but not including)
the trading day immediately preceding the date upon which the Vivendi Voting Interest first equals or exceeds 90%.

Additionally,
Vivendi and its affiliates are prohibited from participating in any share repurchase program initiated by Activision Blizzard and from making purchases in the open market
while any such share repurchase program is operative.

131

THE PROPOSALS

PROPOSAL NO. 1

The Issuance of Shares Under the Business Combination Agreement

Under the terms of the business combination agreement, Activision will issue an aggregate of approximately 358.2 million new shares of Activision common
stock. At the effective time of the merger, each share of Vivendi Games common stock outstanding immediately before the merger will be converted into the right to receive 369,136.36364 shares of
Activision common stock, which will result in the issuance of an aggregate of approximately 295.3 million newly issued shares of Activision common stock to VGAC, the sole stockholder of Vivendi
Games. Concurrently with the merger, Vivendi will purchase from Activision approximately 62.9 million newly issued shares of Activision common stock for an aggregate purchase price of
approximately $1.731 billion in cash. Immediately following completion of the merger and the share purchase, Vivendi and its subsidiaries are expected to own approximately 52.2% of the issued
and outstanding shares of the combined company's common stock on a fully diluted basis.

Under
NASDAQ Marketplace Rule 4350(i), a company listed on NASDAQ is required to obtain stockholder approval prior to the issuance of common stock, among other things,
(a) if the issuance will result in a change of control of the company, or (b) in connection with the acquisition of another company's stock, if the number of shares of common stock to be
issued is in excess of 20% of the number of shares of common stock then outstanding. The 358.2 million newly issued shares of Activision common stock to be issued in the transaction exceed the
20% threshold under the NASDAQ Marketplace Rules and are expected to represent approximately 52.2% of the issued and outstanding shares of the combined company's common stock on a fully diluted basis.
Accordingly, in order to
ensure compliance with NASDAQ Marketplace Rule 4350(i), Activision must obtain the approval of Activision stockholders for the issuance of these securities in the transaction.

Vote Required and Board of Directors Recommendation

Approval of the share issuance proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively on the proposal.
Given that the vote that is required to approve this proposal is based upon the number of shares actually voted, a stockholder's failure to vote on the share issuance proposal will have no effect on
the outcome of the vote for the proposal. Similarly, abstentions with respect to this proposal and broker non-votes will not affect the outcome of the vote, because they will be counted in
determining the presence of a quorum but they will not be considered to be voted for purposes of the share issuance proposal.

Our board of directors has unanimously approved the issuance of shares of our common stock in connection with the transaction and
recommends a vote "FOR" the share issuance proposal.

For
a more detailed description of the business combination agreement and the transaction, see the section entitled "The Business Combination Agreement." See also Annex A to this
proxy statement.

132

PROPOSAL NO. 2

The Amendment and Restatement of Activision's Amended and Restated Certificate of Incorporation, as Amended

In connection with the transaction, Activision and Vivendi have agreed that Activision would amend and restate its certificate of incorporation and bylaws to
implement a number of governance and other
changes. In this proxy statement, the amended and restated certificate of incorporation, in the form attached as Annex B to this proxy statement and is incorporated by reference into this proxy
statement.

At
the special meeting, you will be asked to consider and vote on a proposal to approve the post-closing certificate of incorporation. In order to comply with applicable
rules of the SEC relating to proxy statements, we are also presenting Sub-Proposals Nos. 2A through 2L to Activision stockholders as separate proposals for approval. As a matter of
state law, only the approval of the post-closing certificate of incorporation, as a whole, is required. Because we are required to present the
sub-proposals separately and because all of the revisions to Activision's amended and restated certificate of incorporation that are reflected in the post-closing certificate
of incorporation are considered by Activision and Vivendi to be integral parts of the overall transaction, the approval of Proposal No. 2 and each of the Sub-Proposals 2A through 2L
is a condition to completion of the transaction. Accordingly, a vote against Proposal No. 2 or any of the related Sub-Proposal Nos. 2A through 2L is effectively a vote
against the transaction.

The
following is a summary of selected provisions of the post-closing certificate of incorporation. We believe that this description covers the material terms of the
post-closing certificate of incorporation, which differ materially from Activision's current certificate of incorporation. However, the description may not contain all of the information
that is important to you and is qualified in its entirety by reference to the complete text of the post-closing certificate of incorporation. In conjunction with this summary description,
we encourage you to read the post-closing certificate of incorporation carefully and in its entirety.

The parties to the business combination agreement have agreed that the name of the combined company should reflect its leading product lines and therefore propose
to change the combined company's corporate name from "Activision, Inc." to "Activision Blizzard, Inc."

Sub-Proposal No. 2B: Proposal to increase the number of shares of authorized capital stock.

Activision's current certificate of incorporation authorizes the issuance of up to four hundred fifty-five million (455,000,000) shares of capital
stock, consisting of (a) four hundred fifty million (450,000,000) shares of Activision common stock, par value $0.000001 per share, and (b) five million (5,000,000) shares of preferred
stock, par value $0.000001 per share, two million (2,000,000) of which are designated Series A Junior Preferred Stock, par value $0.000001 per share. On the record
date for the Activision special meeting, Activision had outstanding shares of Activision common stock and
no shares of preferred stock or Series A Junior Preferred Stock.

In
the transaction, Activision expects to issue an aggregate of approximately 358.2 million additional shares of Activision common stock. Activision expects to issue approximately
295.3 million additional shares of common stock to VGAC in connection with the merger. Concurrently with the merger, Activision expects to issue approximately 62.9 million additional
shares of common stock to Vivendi in connection with the share purchase.

133

Activision
is proposing to increase the number of authorized shares of capital stock to give it sufficient authorized shares to complete the transaction and the subsequent tender offer.
The increased share authorization will also provide greater flexibility in the capital structure of the combined company by allowing it to raise capital that may be necessary to further develop its
business, to fund potential acquisitions, to have shares available for use in connection with stock plans and to pursue other corporate purposes that may be identified by the combined company's board
of directors.

To
that end, Activision is proposing to increase the number of authorized shares of capital stock from four hundred fifty-five million (455,000,000) to one billion two
hundred five million (1,205,000,000), of which one billion two hundred million (1,200,000,000) shares will be designated common stock, par value $.000001 per share, and five million (5,000,000) shares
will be designated preferred stock, par value $.000001 per share.

Sub-Proposal No. 2C: Proposal to eliminate the Series A Junior Preferred Stock.

Activision's current certificate of incorporation designates one series of preferred stock, the Series A Junior Preferred Stock, and includes certain
provisions relating to the powers, rights and privileges of the Series A Junior Preferred Stock. On the record date for the Activision special meeting, Activision had no outstanding shares of
Series A Junior Preferred Stock. Therefore, it is proposed that the post-closing certificate of incorporation eliminate the Series A Junior Preferred Stock.

Sub-Proposal No. 2D: Proposal to include certain quorum requirements for committees of the board of directors under certain circumstances.

It is proposed that the post-closing certificate of incorporation include a provision establishing specific quorum requirements for committees of the
Activision Blizzard board of directors. In particular, it is proposed to provide that, prior to the first occurrence of a Triggering Event, a quorum for any regular or special meeting of a committee
of the Activision Blizzard board of directors (other than the special nominating committees and the audit committee), will require the presence, in person, of a majority of the directors appointed to
such committee including at least one independent director. However, if a quorum is not obtained at such committee meeting because no independent director is present, then, for purposes of the next
duly called and noticed committee meeting, a quorum will require the presence, in person, of a majority of the directors appointed to such committee.

Section 5.1(b)
(Quorum Requirements for Committees) and Section 5.3(a)(iii) (Amendment of Certain Bylaw Provisions Protecting Vivendi) may only be amended as
follows: (a) prior to the first occurrence of a Triggering Event, by the affirmative vote of (x) the holders of at least a

134

majority
of the voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote thereon, and (y) the holders of at least a majority of the outstanding shares of
Activision Blizzard's capital stock other than shares of Activision Blizzard's capital stock owned by Vivendi and its controlled affiliated; and (b) after the first occurrence of a Triggering
Event, by the affirmative vote of the holders of more than 662/3% of the voting power of the outstanding shares of the Activision Blizzard's capital stock entitled to vote thereon.



The
affirmative vote of (a) the holders of at least a majority of the voting power of the outstanding shares of the Activision Blizzard's capital stock entitled to
vote thereon, and (b) the holders of at least a majority of the outstanding shares of Activision Blizzard's capital stock other than shares of capital stock owned by Vivendi and Vivendi's
controlled affiliates will be required to amend:

Sub-Proposal No. 2F: Proposal to limit the power of the board of directors to amend certain provisions of the bylaws without stockholder approval.

It is proposed that the post-closing certificate of incorporation will provide that, subject to the exceptions specified below, amendments to the
post-closing bylaws may made by either (a) the affirmative vote of the holders of at least a majority of the voting power of the then outstanding shares of Activision Blizzard's
capital stock entitled to vote thereon, or (b) the Activision Blizzard board of directors at any regular or special meeting without the vote of Activision Blizzard's stockholders.

It
is proposed that the post-closing certificate of incorporation will provide for the following exceptions:



The
affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote thereon will
be required to amend post-closing bylaw provisions that protect the stockholders of Activision Blizzard, including:



Section 2.4
(Special Meetings of Stockholders);



Section 2.6(a)
(Quorum Requirements for Meetings of Stockholders);



Section 2.14
(Notice of Stockholder Business and Nominations); and



Section 8.4
(Amendment of Bylaws) as it relates to the aforementioned sections.



The
affirmative vote of the holders of more than 662/3% of the voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote
thereon will be required to amend Section 3.3 (Vivendi Stockholder's Right to Proportionate Representation); and Section 8.4 (Amendment of Bylaws) as it relates to the aforementioned
section.



Certain
post-closing bylaw provisions protecting Vivendi in its capacity as an Activision Blizzard stockholder may only be amended as follows: (a) prior
to the first occurrence of a Triggering Event, by the affirmative vote of (x) the holders of at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital
stock entitled to vote thereon, and (y) the holders of at least a majority of the outstanding shares of Activision Blizzard's capital stock

135

other
than shares of capital stock owned by Vivendi and its controlled affiliated; and (b) after the first occurrence of a Triggering Event, by the affirmative vote of the holders of more than
662/3% of the voting power of the outstanding shares of Activision Blizzard's capital stock entitled to vote thereon. These provisions include:

Section 8.4
(Amendment of Bylaws) as it relates to the aforementioned sections.



The
affirmative vote of the holders of (a) at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock, and (b) at
least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock other than shares of Activision Blizzard's capital stock owned by Vivendi and Vivendi's controlled
affiliates will be required to amend:



Section 2.3
(Purposes of Annual Meeting; Election of Directors); and



Section 8.4
(Amendment of Bylaws) as it relates to the aforementioned section.



Prior
to the fifth anniversary of the closing date, Section 3.12 (Approval of Certain Matters by Activision Blizzard Board of Directors), Section 4.3 (Chief
Executive Officer) and Section 8.4 (Amendment of Bylaws) (as it relates to the foregoing sections) may only be amended by either:



the
separate affirmative vote of (a) a majority of the votes present or otherwise able to be cast (giving effect to the voting rights of the non-employee
Vivendi designees), and (b) at least a majority of the independent directors; or



the
separate affirmative vote of the holders of (a) at least a majority of the voting power of the outstanding shares of Activision Blizzard's capital stock, and
(b) at least a majority of the outstanding shares of Activision Blizzard's capital stock other than shares of Activision Blizzard's capital stock owned by Vivendi and Vivendi's controlled
affiliates.



In
addition to any vote required by law, the separate affirmative vote of the holders of (a) at least a majority of the shares of Activision Blizzard's capital stock,
and (b) at least a majority of the outstanding shares of Activision Blizzard's capital stock other than shares of Activision Blizzard's capital stock owned by Vivendi and Vivendi's controlled
affiliates will be required to amend:



Section 3.3(b)
as to decrease the percentages in the definitions of "Triggering Event" and "Termination Event" set forth therein, or



any
of the post-closing bylaws in a manner that would be beneficial to Vivendi and Vivendi's controlled affiliates in their capacities as stockholders, other
than amendments that affect the rights of all stockholders in the same manner.

136

Sub-Proposal No. 2G: Proposal to grant the directors designated by Vivendi certain voting powers when other Vivendi designees are not present at board or
committee meetings.

It is proposed that the post-closing certificate of incorporation include a provision to the effect that, prior to the first occurrence of a
Triggering Event, at each meeting of the Activision Blizzard board of directors or any committee thereof (other than the special nominating committees and the audit committee), each of the Vivendi
designees who is not an employee of Activision Blizzard or any of Activision Blizzard's subsidiaries and who is present at the meeting will be entitled to cast a number of votes equal the quotient of
(a) the sum of (x) the total number of Vivendi designees who are not employees of Activision Blizzard or any of Activision Blizzard's subsidiaries and who serve on the Activision
Blizzard board of directors or the relevant committee that are not present at such meeting plus (y) the total number of Vivendi designees (other
than Vivendi designees who are not employees of Activision Blizzard or any of Activision Blizzard's subsidiaries) on the Activision Blizzard board of directors or relevant committee that are not
present at such meeting, divided by (b) the total number of Vivendi designees who are not employees of Activision Blizzard or any of Activision Blizzard's subsidiaries and who are present at
such meeting.

Sub-Proposal No. 2H: Proposal to include limitations on certain business activities in which Vivendi may, directly or indirectly, engage or participate.

It is proposed to include a provision in the post-closing certificate of incorporation to the effect that neither Vivendi nor any of its controlled
affiliates is under an obligation to refrain from engaging in the same or similar activities or lines of business as Activision Blizzard other than businesses conducted by Blizzard Entertainment and
Sierra immediately prior to the closing; provided, however, that the businesses conducted by Vivendi and its controlled affiliates as of the closing date will not be considered a competing business.
Neither Vivendi nor any of its officers or directors will be liable to Activision Blizzard or its stockholders for breach of any fiduciary duty by reason of any such activities.

It is proposed that the post-closing certificate of incorporation provide that, in the event that Vivendi acquires knowledge of a potential corporate
opportunity for both Vivendi and Activision Blizzard, Vivendi will have no duty to communicate or offer the corporate opportunity to Activision Blizzard and will not be liable to Activision Blizzard
or Activision Blizzard's stockholders for breach of any fiduciary duty as a stockholder of Activision Blizzard by reason of the fact that Vivendi acquires or seeks the corporate opportunity for
itself, directs the corporate opportunity to another person or entity, or otherwise does not communicate information regarding the corporate opportunity to Activision Blizzard.

In
addition, it is proposed that the post-closing certificate of incorporation provide that, if a director or officer of Activision Blizzard who is also a director or officer
of Vivendi, acts in a manner consistent with the following policy with respect to the allocation of a potential corporate opportunity for both Activision Blizzard and Vivendi about which such director
acquires knowledge, he or she will have fully satisfied and fulfilled his or her fiduciary duty to Activision Blizzard and Activision Blizzard's stockholders with respect to the corporate opportunity.
A corporate opportunity for both Activision Blizzard and Vivendi offered to any person who is an officer or director of Activision Blizzard and who is also an officer, director or employee of Vivendi,
will belong to Vivendi unless such corporate opportunity was expressly offered to such person in his or her capacity as a director or officer of Activision Blizzard.

137

Sub-Proposal No. 2J: Proposal to require Vivendi or Activision Blizzard to purchase all of the combined company's issued and outstanding shares of Activision
Blizzard common stock if and when Vivendi becomes the record owner of more than 90% of the issued and outstanding shares of Activision Blizzard common stock.

It is proposed to include a provision in the post-closing certificate of incorporation that will require Vivendi to purchase all of the issued and
outstanding shares of Activision Blizzard common stock under certain specified circumstances. The proposed provision would provide that, in the event that the Vivendi Voting Interest equals or exceeds
90%, either Vivendi or Activision Blizzard will, within sixty (60) days following the date upon which the Vivendi Voting Interest first equals or exceeds 90%, commence a tender offer to acquire
all shares of Activision Blizzard common stock not owned by Vivendi as of such date at a price not less than the volume-weighted average closing price per share of Activision Blizzard common stock, as
reported on NASDAQ (or, if applicable, such other national securities exchange on which Activision Blizzard's common stock is listed), as reported by Bloomberg, L.P., for the twenty
(20) consecutive trading days immediately preceding (but not including)
the trading day immediately preceding the date upon which the Vivendi Voting Interest first equals or exceeds 90%.

In
addition, the proposed provision would provide that, at any time on or before the date upon which the Vivendi Voting Interest first equals or exceeds 90%, Vivendi may (but is not
obligated to) cause Activision Blizzard to effect a merger or other business combination pursuant to which the holders of the shares of Activision Blizzard common stock not owned by Vivendi as of such
date will receive, in exchange for each of their shares, an amount equal to a price not less than the volume-weighted average closing price per share of Activision Blizzard common stock, as reported
on NASDAQ (or, if applicable, such other national securities exchange on which Activision Blizzard's common stock is listed), as reported by Bloomberg, L.P., for the twenty
(20) consecutive trading days immediately preceding (but not including) the trading day immediately preceding the date upon which the Vivendi Voting Interest first equals or exceeds 90%.

It is proposed that the post-closing certificate of incorporation include a provision stipulating that, unless the Vivendi Voting Interest
(a) equals or exceeds 90% or (b) is less than 35%, any merger, business combination or similar transaction involving Activision Blizzard or any of its subsidiaries, on the one hand, and
Vivendi or Vivendi's directly or indirectly controlled affiliates, on the other, must be approved, in addition to any approval required pursuant to the DGCL and/or the post-closing bylaws,
by the affirmative vote of a majority in interest of the stockholders of Activision Blizzard, other than Vivendi or Vivendi's directly or indirectly controlled affiliates, that are present and
entitled to vote at a stockholders' meeting called for such purpose.

Sub-Proposal No. 2L: Proposal to cause Activision Blizzard to be governed by Section 203 of the DGCL, a statute which restricts business combinations
between corporations and their significant stockholders.

Activision's current certificate of incorporation contains a provision expressly electing that Activision not be governed by Section 203 of the DGCL.
Section 203 of the DGCL generally provides that any person who acquires 15% or more of a corporation's voting stock (thereby becoming an "interested stockholder") may not engage in a wide range
of business combinations with the

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corporation
for a period of three years following the date the person became an interested stockholder, unless:



the
board of directors of the corporation has approved, prior to that acquisition date, either the business combination or the transaction that resulted in the person
becoming an interested stockholder;



upon
consummation of the transaction that resulted in the person becoming an interested stockholder, that person owns at least 85% of the corporation's voting stock
outstanding at the time the transaction commenced (excluding shares owned by persons who are directors and also officers and shares owned by employee stock plans in which participants do not have the
right to determine confidentially whether shares will be tendered in a tender or exchange offer), or



the
business combination is approved by the board of directors and authorized by the affirmative vote (at an annual or special meeting and not by written consent) of at
least 662/3% of the outstanding voting stock not owned by the interested stockholder.

It
is proposed that neither the post-closing certificate of incorporation nor the post-closing bylaws contain a provision pursuant to which Activision Blizzard
will opt out of Section 203 of the DGCL. Accordingly, Activision Blizzard will be governed by Section 203 of the DGCL.

Vote Required and Board of Directors Recommendation

In accordance with Section 242 of the Delaware General Corporation Law, approval of Proposal No. 2 and each of the subproposals 2A through 2L
require the affirmative vote of the holders of a majority of the outstanding shares of Activision common stock entitled to vote on the proposal at the special meeting.

The Activision board of directors has unanimously approved the amendment and restatement of Activision's certificate of incorporation
and recommends a vote "FOR" Proposal No. 2, including each of the Sub-Proposals 2A through 2L.

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PROPOSAL NO. 3

The Amendment of Section 7.4(a) of Activision's Third Amended and Restated Bylaws

Activision's current bylaws provide that Section 7.4(a) may only be amended by the vote of a majority in interest of Activision stockholders represented
and entitled to vote at any meeting at which a quorum is present.

Activision
is proposing to amend Section 7.4(a) of its third amended and restated bylaws to read in its entirety as follows:

"Amendment
of By-Laws. The by-laws of the Corporation may be altered, amended or repealed or new by-laws may be made or
adopted by the Board of Directors at any regular or special meeting of the Board; provided, however,
that Sections 2.3, 2.4, 2.6(a), 2.14, 3.2(b), 3.3, 3.4(b), 3.6, 3.10(c), 3.10(d), 3.10(f), 3.12, 4.3 and Section 8.4 of these by-laws may
be altered, amended or repealed only as provided in the Certificate of Incorporation."

Vote Required and Board of Directors Recommendation

The affirmative vote of the holders of a majority of the outstanding shares of Activision common stock entitled to vote is required to approve Proposal
No. 3.

In the event that the number of shares of Activision common stock present in person or represented by proxy at the special meeting is insufficient to approve the
share issuance proposal, the charter amendment proposal and the bylaw amendment proposal, Activision may move to adjourn or postpone the special meeting in order to enable the Activision board of
directors to solicit additional proxies in favor of the approval of the share issuance proposal, the charter amendment proposal and the bylaw amendment proposal. In that event, Activision will ask its
stockholders to vote only upon the adjournment proposal and not on the other proposals discussed in this proxy statement.

Vote Required and Board of Directors Recommendation

Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively on the proposal.

The Activision board of directors unanimously recommends a vote "FOR" the adjournment proposal.

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OTHER MATTERS TO COME BEFORE THE MEETING

No other matters are intended to be brought before the special meeting by Activision, and Activision does not know of any matters to be brought before the special
meeting by others. If, however, any other matters properly come before the meeting, the persons named in the proxy will vote the shares represented thereby in accordance with the judgment of
management on any such matter.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2007 and for the year ended December
31, 2006 give effect to the transaction as if it was consummated on January 1, 2006 and include all adjustments which give effect to events that are directly attributable to the
transaction, expected to have a continuing impact, and that are factually supportable. The unaudited pro forma condensed combined balance sheet as of September 30, 2007 gives effect to the
transaction as if it had been consummated on September 30, 2007 and includes all adjustments which give effect to events that are directly attributable to the transaction and that are factually
supportable. The notes to the pro forma financial information describe the pro forma amounts and adjustments presented below.

The
pro forma adjustments reflecting the consummation of the transaction are based upon the purchase method of accounting in accordance with U.S. GAAP, and upon the assumptions
set forth in the notes herein. The unaudited pro forma condensed combined balance sheet has been adjusted to reflect the preliminary allocation of the estimated purchase price to identifiable net
assets acquired and the excess purchase price to goodwill. The allocation of the purchase price is preliminary and is dependent upon certain valuations and other studies that have not progressed to a
stage where there is sufficient information to make a definitive allocation. In addition, the estimated purchase price itself is preliminary and will be adjusted based upon the Activision share price
on the date of closing. Accordingly, the final purchase accounting adjustments may be materially different from the preliminary pro forma adjustments presented herein. This unaudited pro forma
condensed combined financial information should be read in conjunction with the financial information appearing under "Selected Historical Financial Data of Activision" and "Selected Historical
Financial Data of Vivendi Games" and the historical financial statements of Activision and Vivendi Games included elsewhere in this proxy statement.

Additional
pro forma adjustments have been made to reflect the repurchase of 146.5 million shares of Activision Blizzard common stock at $27.50 per share, representing the maximum
amount of shares to be purchased under the cash tender offer commencing within five (5) business days after the closing of the transaction. According to the terms of the business combination
agreement the tender offer will be funded with: (a) Activision's available cash on hand including $1.731 billion in proceeds from the sale of 62.9 million shares to Vivendi, short
term investments (excluding restricted cash) and borrowings made under one or more new credit facilities from Vivendi or a third party lender for the first $2.928 billion of the aggregate
tender, (b) proceeds from the issuance of additional shares to Vivendi for $700 million, and (c) additional borrowings under such credit facilities from Vivendi or a third party
lender. For purposes of the other adjustments, borrowings are assumed to come from Vivendi. Actual shares purchased in the tender offer could be less than 146.5 million which would impact the
adjusted pro forma amounts.

The
pro forma adjustments do not reflect any operating efficiencies or inefficiencies which may result from the transaction. Therefore, the unaudited pro forma condensed combined
financial information is not necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that Activision Blizzard will
experience after the transaction is consummated. In addition, the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These
estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. These estimates and assumptions are preliminary and have been made solely for purposes of developing this pro forma information. Actual results could
differ, perhaps materially, from these estimates and assumptions.